Women comprise more than half of the U.S. population, but no two women are the same when it comes to managing their money. When we surveyed investors, women were optimistic about their ability to achieve short- and long-term investment goals and have become increasingly assured that the stock market is a good place to invest. We also found that women investors are more likely to work with an investment professional and more inclined to stick to their investment plan.

At some point in their lives, most women likely will be in charge of their family’s finances. Women have increasingly become the sole or primary breadwinners for their families and often take a leading role in educating the next generation in financial matters.

Studies reveal that women have smaller nest eggs when compared with men of similar age and income, in part because many may invest more conservatively. Additionally, because women, on average, earn less per dollar than men and often report taking time off from work to care for others, they can fall behind financially. With careful planning and appropriate investment allocations, we believe women can be prepared to reach their financial goals.

What women say about their finances

In a 2021 survey, women indicated that they are less confident in fully funding their retirement, with just 20% of women highly confident they will have enough money to maintain their lifestyle in retirement compared with 25% of men. Among other findings:

72% of women believe that the stock market is a good place to grow their retirement savings, while over 76% of men believe so.

49% of women have a written plan for finances and retirement compared with 44% of men.


Important strengths

In our study of Wells Fargo Advisors clients, we found that women exhibited several important strengths related to their investment success, including discipline, willingness to learn, and a selective approach to risk-taking.

Women’s greater willingness to develop a financial plan, adhere to that plan, and work with an advisor are among the factors we believe led to attractive investment results. In a study covering the period January 2016 to December 2020, female-led accounts achieved higher absolute returns than male-led accounts for the five-year period. On a risk-adjusted basis, women investors led men, with single-female accounts leading followed by female-led accounts.

This means that women achieved higher returns on their investments while taking on less risk than men, when risk is measured by standard deviation. The Wells Fargo Wealth and Investment Management Analytics data showed that women investors, on average, took approximately 82% of the risk that men took.4

Following a sound investment strategy and taking appropriate levels of risk are important to long-term results.

Risk-adjusted returns for women and men

Single-female and female-led accounts achieved higher risk-adjusted investment returns than men.

Bar chart lists risk-adjusted returns for accounts: female led (1.29), male led (1.22), single female (1.37), and single male (1.15).

Source: Gender Differences in Performance at Wells Fargo Advisors, Wealth & Investment Management (WIM) Analytics, July 2021. The total study included more than 50,000 accounts from December 2010 to 2020 with investable assets of $50,000 or more. Excludes advisory accounts. Five-year time-weighted (or geometric mean) returns net of commissions and fees between January 2016 and December 2020. Past performance is no guarantee of future results. Performance results represent only the results of the survey.

What you can do now

Learn more about investing: Talking with an investment professional or a financial planner can help you understand the basics of investing — things like setting aside enough cash for an emergency, defining your time horizon and risk tolerance, and developing an appropriate asset allocation.

You can also learn about investing by reading financial journals, watching financial news channels to learn the industry terminology, or listening to investment-related podcasts or market updates on the radio.

Setting investment goals: Investment goals can be as varied as the people who define them, but they generally fall into the categories of income, growth, or a mix of the two. Moreover, each of your investment goals will generally have an associated time period that helps determine what type of assets you should potentially use to assist you in reaching your investment goals with the appropriate level of risk.

Read the full report (PDF)