Women Are Outperforming in Investing—Here’s How You Can Too

For years, the world of investing has felt like a closed club, historically dominated by men. The imagery surrounding stock markets—the shouting, the fast-paced trades, the risk-taking—has often alienated women from these financial conversations. Yet, despite this, recent research shows that women not only make great investors but often outperform their male counterparts. So why does the myth persist that women aren’t as savvy in the investing world?

We're here to give you the facts you need and clear away the myths holding you back.

Vestpod’s Money Matters Festival 2024 at KOKO, Camden.

The Gender Investment Myth: Risk-Averse or Risk-Aware?

One of the biggest misconceptions about women investors is that they’re too "risk-averse" to make strong financial gains. But this narrative isn’t exactly right. Women aren't risk-averse; they're risk-aware.

Studies, like the one conducted by Warwick Business School show that women are more likely to approach investing with caution and thorough research. This methodical approach allows them to make thoughtful, long-term decisions, which often leads to better outcomes. Over three years, the study found that women outperformed their male counterparts by nearly 2% (Warwick Business School, 2018). Rather than shying away from risk, women are more strategic in how they manage it.

In fact, the Fidelity 2021 Women and Investing Study found that women investors earned an average of 0.4% more per year than men (Fidelity Women and Investing Study, 2021). While that difference might sound small, compounded over time, it results in significantly higher returns. So, someone who invests £1 million over 25 years at a 7.4% annual return (the average for women) would have £530,000 more than an investor earning just 7%.

Women Outperform Men

Studies have shown that women tend to outperform men in investing. According to Fidelity, women outperform men by 40 basis points or 0.4%. A study from Warwick Business School found an even larger gap, with women outperforming men by 1.8%.

Patience Pays: Long-Term Focus Over Short-Term Gains

One of the key reasons women tend to perform better as investors is their long-term focus. Women tend to adopt a “buy and hold” strategy, and less often more prone to speculative trading and overconfidence. 

The study also revealed that men trade their portfolios 45% more frequently than women. While that might sound proactive, over-trading can actually hurt performance, leading to unnecessary transaction fees and rash decisions based on short-term market movements.

According to Hargreaves Lansdown, women were 50% less likely to suffer a 30% loss on their investments during a volatile market, simply because they avoided high-risk, speculative assets like single company stocks (Hargreaves Lansdown Report, 2020). 

Instead, women were more likely to diversify their portfolios, which protected them from significant downturns. 

This patient, steady approach is why women often see greater long-term success in their investments. Women are more likely to hold onto their investments through market fluctuations rather than panic-selling during downturns—resulting in greater returns over time. Remember: boring investing is good!

The Confidence Gap: What’s Holding Women Back?

If women are such strong investors, why aren’t more women diving into the stock market with confidence? One of the biggest barriers is the “confidence gap.”

Despite their proven success, many women don’t see themselves as “investors.” The Fidelity Study also showed that while 67% of women are now investing outside of their retirement accounts (up from 44% in 2018), only 33% identify as investors. This lack of confidence often stems from outdated stereotypes that paint finance as a male-dominated arena, reinforced by a financial industry that historically hasn’t catered to women.

Despite lower confidence levels (only 28% of women felt confident about investing their money according to a BNY Mellon study), women who do invest often take the time to educate themselves and research their options thoroughly.

Women Are Goal Oriented

Women tend to focus on specific financial goals when investing, which can lead to more disciplined and focused investment strategies.

Another area where women excel is in Environmental, Social, and Governance (ESG) investing. Women are more likely than men to seek out investments that align with their values, focusing on companies committed to sustainability, diversity, and social impact. In fact, a survey by U.S. Trust found that 76% of women investors are interested in impact investing compared to just 62% of men (U.S. Trust, Insights on Wealth and Worth, 2017).

The rise of ESG investing presents an enormous opportunity for women to leverage their natural strengths in research and long-term planning to make both a financial return and a positive societal impact. This is especially relevant in today’s climate-conscious world, where ethical and sustainable investing is on the rise.

The Power of Diverse Perspectives

Women also bring a unique perspective to investing, particularly in terms of consumer insight. As the primary decision-makers for 75% of global discretionary spending (Boston Consulting Group, 2020), women have a keen understanding of market trends, consumer behaviour, and the products that drive the economy. This can translate into smarter investment choices, particularly in industries such as retail, healthcare, and technology, where women have deep consumer insights.

Moreover, diversity in decision-making leads to better outcomes—this is true not only in business but also in finance. Companies with diverse boards are more likely to outperform those with homogeneous leadership (McKinsey Global Institute, 2015), and the same principle applies to investment portfolios. Women’s perspectives, informed by different experiences and insights, contribute to more balanced and robust portfolios.

What Needs to Change?

Despite the clear strengths women bring to the investing world, there’s still a gap in participation. To close it, we need to take concrete steps to empower more women to invest.

• Financial Education for Women: We need to continue pushing for financial education that addresses the unique challenges women face, from career breaks for caregiving to longer life expectancies. Platforms like Vestpod are helping to lead the way by providing women with the resources and community support they need to feel confident in their financial decisions.

• More Money in the Hands of Women:  When more money is in the hands of women, it doesn’t just boost individual financial security—it sparks change across entire communities. Women are more likely to reinvest in areas like education, healthcare, and family well-being, driving long-term social and economic improvements. This financial power helps close the gender wealth gap and fosters greater equality in decision-making, both in households and in broader society.

• More Female Financial Advisers: Currently, only 16% of financial advisers in the UK are women (Office for National Statistics, 2020), and that number needs to grow. Having more female voices in the finance industry can help create a more inclusive and supportive environment for women investors.

• Challenging Stereotypes: We need to continue breaking down the stereotypes that portray women as less capable investors. Women’s strengths—patience, research, and long-term focus—should be celebrated, not dismissed. This mindset shift is essential to closing the gender investment gap.

Here’s How You Can Join the Women Winning at Investing

Feeling inspired by the stories of women outperforming in the investing world? Good. The best part is, you don’t need to be a financial genius to get started. With the right tools and mindset, you can be part of the growing wave of women taking charge of their financial futures. Here’s how to make your move:

• Before you get started

  First, define your financial goals—knowing what you want to achieve will guide your investment choices. Next, build an emergency fund with three to six months' worth of living expenses to provide a safety net for unexpected costs. It's also wise to pay off any high-interest debt, as the interest can often outpace potential investment gains. Finally, create a budget to see how much you can comfortably invest each month. 

• Start Small, Dream Big
  You don’t need thousands to start investing. In fact, you can begin with as little as your spare change or £50 a month. It’s not about the size of your investment, but the consistency. The earlier you start, the longer your money has to grow. And remember, compound interest is your best friend, letting your returns stack up year after year.

• Get Clued Up
  Don’t worry, you don’t have to be an expert from day one. Start by learning the basics of investing and personal finance. Vestpod’s bootcamps are designed just for you, offering bite-sized courses that break down intimidating financial concepts into simple, actionable steps. Explaining concepts in plain English is key to building your confidence. Whether you're figuring out how to budget, invest, or build your retirement fund, there’s a course out there for you.

• Reframe risk
  Many people associate risk with the fear of losing money, but in reality, risk is a natural part of investing that can be managed, we tend to see it as an opportunity to build wealth and achieve our goals! Doing nothing with your money also carries risk, particularly the risk of inflation eroding its value over time. By diversifying your investments and taking a long-term approach, you can mitigate some risks while positioning yourself for growth.

• Leverage the (Fin)Tech
  The market has democratised immensely, allowing anyone interested in investing to benefit greatly from FinTech (Financial Technology) tools. For example, robo-advisers provide user-friendly interfaces, educational resources, and low-cost investment options. Many fintech companies help you to start investing with small amounts, making it easier than ever to take control of your financial future.

• Play the Long Game
  Women tend to think long-term—and that’s where they win. The secret to successful investing isn’t about chasing the latest stock trend; it’s about patience. Build a portfolio that reflects your goals. The market will have its ups and downs, but your future self will thank you for sticking to your plan. You will also not miss the good days in the stock market and let your money compound over time.

• Make It Automatic, set it and leave it
  Automation is the key to staying consistent. Set up automatic payments into your investment accounts so you don’t even have to think about it. It’s a stress-free way to ensure you're investing every month, even when life gets busy. The best part is that you’ll barely notice the money leaving your account, but you’ll love seeing it grow over time.

• Understand your taxes
  Consider tax efficiency to maximise your returns. In the UK, take advantage of tax-efficient accounts like Individual Savings Accounts (ISAs) and pensions. ISAs allow you to invest up to £20,000 per year (as of 2024/2025) without paying tax on the gains or income. Pensions offer tax relief on contributions, effectively boosting your investment. Always check for the latest rules.

• Join the Movement
  You don’t have to do this alone. Surround yourself with a community of women who are also on their investing journey. Vestpod’s community is full of inspiring stories, practical advice, and real conversations about money. It’s a space where women share their wins and lessons, and where you can find the support you need to keep going.

Ready to Step Into Your Financial Power?

At Vestpod, we’re here to help you take control of your money with confidence. Our content and bootcamps, as well as our community are designed to arm you with the knowledge and tools to make smart investment moves—without the jargon or intimidation.