Women make strides, but remain underinvested
The Fearless Girl statue is depicted hanging an American flag on the facade of the New York Stock Exchange in Manhattan on November 5, 2024, on the 2024 US Presidential Election Day in New York City, USA.
Stephani Spindel | Reuters
Aviva Mehta noticed that her husband regularly talked about money and investing in his social circle. He set out to do the same among the women in his life.
The 27-year-old started a book club focused on personal finance. The topic comes up regularly in video calls with friends. Last evening, the New York resident discussed investing over a glass of wine.
“Women are making progress in every field,” Mehta said. “We need to normalize this for women and not look at it as something only men do.”
Women are gaining ground and, in some cases, outpacing men on a variety of measures of financial and professional health. But a data analysis shows that women are not breaking the glass ceiling when it comes to stock market participation; this is an idiosyncrasy that advocates adherence to social norms and persistent wage inequalities.
Single women are more likely to own homes. Women outnumber men at all levels of higher education. This month’s Indeed report shows that it is now available more women more than men in the workforce.
But one JPMorgan analysis Federal government data shows that women will make up about 35% of investors by 2025. Data shows that this share is about the same as it was seven years ago.
“We don’t encourage girls as much as we encourage boys to be careful about money and finances as kids,” said Jennifer Itzkowitz, a professor at Seton Hall University who focuses on gender-related issues in finance. “They’re not interested in it because they’ve never been motivated or encouraged to think about it.”
Pay gap and risk aversion
Part of the inequality stems from the fact that women generally earn less than men. National Women’s Law Center We found that women earn approximately 81 cents for every dollar a man earns. A Glassdoor report published this month showed that pay inequality widens with age.
Experts have long said that women’s natural aversion to risk may make them less likely to invest their money in the stock market. Added to this is the long-standing societal belief that money and finances are “men’s work”, with women expected to focus on domestic priorities such as cooking and childcare.
But Wells Fargo noted that this caution about risk may make women better investors once they enter the market because they are less likely to choose investments with higher volatility or try to time market swings. Research has long shown that female investors tend to outperform men on a risk-adjusted basis.
“Maybe they’re not taking as much risk in their accounts as their male counterparts,” said Veronica Willis, global investment strategist at Wells Fargo Investment Institute. “But maybe it’s for the best.”
Her ability to spot trends in consumer spending and brand penetration has given Breanna Giglio and other women she knows an advantage.
The Texas-based event planner, for example, said it bought shares. elf beauty after the cosmetics company announced plans to acquire Hailey Bieber’s Rhode brand in May as a short-term swap. Shares of Elf had their best day in history, rising more than 23% in the trading session following the announcement.
“A lot of the things that affect the stock market also happen in life and popular culture,” Giglio said. “Women do most of the household shopping, so it would make sense for them to invest in homes later.”
‘We are closing a gap’
A network of women is trying to get others to join the market.
At Fordham University, hundreds of female students gather for the Smart Women Securities meeting to learn about stocks and analysis of financial statements, according to Rosa Romeo, a Fordham accounting professor who oversees the group. They also do stock sales for judges.
“If you’re investing, you’re automatically filling a gap that we’ve seen over and over again,” Dunlap told CNBC. “You don’t become the statistic of the woman who actually waits or never invests, and that’s very powerful.”
Tori Dunlap hosts a workshop
Karya Schanilec
Data shows progress should be on the horizon: Fidelity, bigger share 80% of women surveyed had invested in the stock market from 2023 to 2024. But despite the growth, more than half of women believe investing is scary.
Women will increasingly become a client base for wealth managers to target, as women are expected to particularly benefit from the ongoing wealth transfer. Until inequality is resolved, the stock market will miss out on inflows that would make it more stable, Seton Hall’s Itzkowitz said.
“We’re letting them fall behind,” Itzkowitz said. “It’s bad for women. It’s bad for society. It’s bad for the market.”
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