Invest Financial Planning

This is Not a Game: Why Current Investing Trends Aren’t Working for Women

Michaela McDonald  |  May 13, 2021

Stay unapologetic with your investing questions and needs as a woman, and take control of your financial future today — don’t wait for the industry to catch up.

The start of 2021 has brought a lot of noise to the investing industry, between news outlets constantly reporting on the never-ending GameStop saga, record high levels of day-trading activity and Elon Musk’s Twitter account. It’s important to take these stories in for what they are — just noise. Yet despite the hype, one issue remains unaddressed: women investors are getting lost in the noise and these investing tactics aren’t fitting the bill for women. According to research from S&P Global, only 26% of women currently have money in the stock market.

For years, investing firms have remarked how difficult it is to attract more women to their investing platforms. The stark truth is that a whopping 99% of investing firms are still owned by white men today, giving women little room to help improve and shift the industry so it works with them in mind.

READ MORE: 4 Powerful Ways Investing In Your Financial Future Is A Form Of Self Care

The investing industry was largely built by men and is still run by men, meaning the needs of women investors have not been considered or served particularly well. According to research from Merrill Lynch, “41% of women say not investing more is their biggest regret and 60% cite a lack of knowledge and 34% cite confidence as top barriers.”

The industry has been slow to adopt a more inclusive tone and adapt their offerings to appeal to women in the right way, both contributing to America’s gender investing gap. 

Despite these barriers, research shows that when women do invest, they out-perform men in the market. As a woman, you likely know just as much if not more than the man sitting next to you, it’s time to start investing like it. 

So, how do women break into a world that wasn’t built for them? By cultivating unapologetic, unrelenting confidence. Some advice and direction can’t hurt either.

Don’t Play the Game

Some brokerage firms are gamifying their investing products by adding rewards, points, and even confetti to their interfaces. This trend has been most attractive to young people and first time investors, largely men, who want to try their hand at “winning” the stock market.

READ MORE: How Every Woman Can Become An Investing Pro

Why aren’t women responding to these trends? Research shows women are less risk-taking and sensation-seeking than men. The way gamified investing products are built encourages the opposite behavior, and alienates women from taking part in the current investing boom. When women do invest, they focus on keeping their investments diversified and are more likely to buy and hold their investments, even through rocky stretches of returns when others may be tempted to sell.  

These gamification tactics, combined with the growing popularity of day-trading, creates a risky narrative that women may be rightly hesitant to join. Limiting your investing scope to a few single stocks and a day-by-day timeline goes against investing best practices.

In short, current investing trends are naturally less appealing to women, for better or worse.
The real issue here is that as a result, it may be detering women from getting in on the biggest proven factor of investing success: time in the market. Every day women go without invested money is a missed opportunity for potential growth, and can add up significantly over time. According to Blackrock, women hold over 70% of their assets in cash.

The investing industry needs to do better by women, starting with more women representation, relatable messaging and better financial education opportunities. Facing a gender pay gap of 82 cents for every dollar a man earns, the need for women to invest smartly and start making their money work for them is critical. Less gimmick, more substance. 

Invest Early, Invest Often

While it’s true that financial concerns like high-interest rate debt should take priority, it can be just as harmful to put off investing until you’re completely debt free. Why? It pays to invest early. And that’s on compound interest. 

Financial goals don’t need to be consecutive — they should operate side by side. While working on a financial foundation, learn how to invest too. This is especially important when it comes to retirement, as women live longer than men and will likely need a longer income stream because of it.

Where to begin? Investing has very few barriers to entry nowadays, a success from the push for greater accessibility over the past decade. People can start investing with as little as $1 on investing platforms with no additional fees. Invest a small amount of money (even if it’s just $5-10) each month in order to gain experience and valuable time in the market. If you haven’t invested before, challenge yourself to research how to get invested within the next 24 hours — your future self will thank you. 

Don’t worry too much about what to invest in, as modern investing technology does that work for you by allowing you to easily choose prefixed portfolios customized to your risk tolerance and financial goals. Using these tools can help you build a diversified, healthy portfolio right off the bat. 

Get Excited for What’s to Come

A women-investing boom is on the horizon, as women are completing secondary education at a higher rate than men and continue to take over the general workforce.

What’s more, as women become a larger part of the investment industry itself, more women may be drawn to investing products in general. Companies like Ellevest and Basis are great examples of this progress. When women have a voice in how a company is built, it will organically attract more women as consumers.

Bottom line: if you have future financial goals, you need investments to match them, maybe not a few years from now, but today.  If you are a woman who wants to one day own a small business, there is an investment plan for you. If you are a woman who wants to retire early, there is an investment plan for you. If you are a woman who wants to send her children to college, there is an investment plan for you. 

Stay unapologetic with your investing questions and needs, and take control of your financial future today — don’t wait for the industry to catch up.

Author’s Note: Investing involves risk. Investing in stocks can be volatile and involves risk, including loss of principal. Consider your individual circumstances prior to investing. Diversification strategies do not ensure a profit and do not protect against losses in declining markets.
Editor’s note: We maintain a strict editorial policy and a judgment-free zone for our community, and we also strive to remain transparent in everything we do. Posts may contain references and links to products from our partners. Learn more about how we make money.

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