Women and Investing: 8 Strategies to Empower Yourself and Invest With Confidence

"The most difficult thing is the decision to act, the rest is merely tenacity." While American aviation pioneer Amelia Earhart wasn't talking about women in investing when she said this inspirational quote, nowhere does it ring more true than when it comes to your financial future. 

More women than ever are overcoming the first hurdle towards financial security—as of 2023, around 60% invest in the stock market, and 68% save for retirement. Women in America are expected to control much of the $30 trillion in financial assets that baby boomers possess today by 2030, according to global management consulting firm McKinsey.

But even though the answer to “are more women investing?” is a resounding yes, many of us are still holding back. While women investors have been shown to have positive returns that outperform those of men by 40 basis points, a BNY Mellon study found that if women invested at the same rate as men, there would be an additional $3.22 trillion in assets under management from private individuals.

We talked to an expert about practical strategies to help you feel empowered to invest and the best way to make the most of your money—today and for years to come. 

Why aren’t women investing more? 

Around 66% of women cite the pandemic and the cost of living as motivation to take more control of their money, but still 62% describe fear of risk as a barrier to investing, followed by lack of knowledge/information (48%), and lack of trust in investment/products and providers (45%). 

It’s that risk aversion that causes many women to become “savers” instead of “investors,”—they prefer to keep their savings in cash or bank accounts instead of getting a higher return on their money by putting it into investments. 

“I find that women are more risk-aware than risk-averse,” says Cameron Rogers, CFA, Private Wealth Advisor with Ellevest. “Which is fine, unless this risk-awareness results in women not taking action with their money.  Women have a propensity to view money as this static thing—a scarce resource. And the view is that there’s only one direction money can go, which is down. This manifests into the reality that women hold over 70% of their wealth in cash.”

While it might feel safer in the moment, keeping all your money in cash (say, in a savings account) can actually cost women money in the long run. As of June 2024, the national average savings account interest rate was 0.45% APY, whereas the average stock market return is about 10% per year. This means you could be making double the amount of money on your investment every year. 

Why it’s important for women to invest

It makes sense for everyone—male or female—to take control of their money. But it’s especially important for women, who are often faced with unique situations that require financial planning that’s different from men. 

Because the average age of divorce is 30 and the average age of widowhood is 59, financial independence and literacy help ensure that women can properly manage their household finances.

Often the caregivers, 22% of women report not saving as much for retirement due to caregiving responsibilities, and 81% of female retirees have experienced at least one unexpected financial event, versus 69% of men. 

In addition, women traditionally live longer than men, which may mean they’ll deal with additional healthcare costs and need to stretch their retirement funds for a longer period of time.

Investment for women: 8 strategies to invest more confidently

Knowledge is power, and understanding the unique financial challenges you might face empowers you to take control of your money and make the most out of it. So, what is the strategy of women investing confidently? Here are expert-backed tips to get there.

1. Set financial goals

Before you start investing, you need a clear roadmap to your short and long-term financial goals—whether it’s saving for a new car or for a comfortable retirement. Once you’ve identified what you want your financial future to look like, you can create a plan to help you maximize your savings and investment. 

2. Do your research 

It can feel overwhelming to try and understand all of your investment options—everything from stocks and bonds to mutual funds—but it starts by becoming educated about what’s available and how it can fit into your financial goals. 

This can be done through reading investment and financial websites, taking online courses, joining networking groups, and working with a financial advisor who can help you understand the complexity of investment options. (Here are our top picks for the best personal finance books for women to help you kickstart your financial literacy journey.)

3. Automate your investing

“Aim to invest steadily and consistently—a little bit out of every paycheck,” Rogers says. “Automating the investment of one’s money also helps to address this issue of inertia for women.”

She says that while dips in the stock markets can be scary, they’re an opportunity for young investors, because you’re investing when the cost to invest in the markets is cheaper. “It’s nearly impossible to call the peaks and troughs of the stock market,” she says, “which is why it’s important to automate your investing—you'll have the opportunity to invest in stock market pullbacks without having to actively time your investing.”

4. Be willing to take educated risks to get a greater long-term ROI

As they say, “high risk, high reward”—but high risk could also mean high loss due to market volatility. You have to decide what level of risk you’re both willing and able to take, meaning how comfortable you are and what your financial situation allows. 

Your risk level might be higher if your financial goal is decades away, which would allow plenty of time to recover from any market downtowns, as opposed to someone with immediate goals (retirement, buying a house) who would be more negatively affected by inflation or a downturn. 

Generally speaking, making educated decisions about higher-risk investments can result in greater gains for your financial future. 

5. Diversify your portfolio 

The best way to minimize your risk is to diversify your portfolio, which means spreading your money throughout various investment products—mutual funds and bonds, for example—instead of in only one space. 

A balanced allocation of your funds means you’re never at risk of losing everything if one particular area takes a hit, and Rogers advises to ensure that money geared for both short- and long-term goals is invested in assets that align with the timing of those goals. 

It’s also helpful to annually look at your allocation and “rebalance” your portfolio, making adjustments to address any imbalances. 

6. Take advantage of retirement accounts

“The most common retirement accounts are a 401(k) and an individual retirement account (IRA),” Rogers says. “They’re both investment accounts, they both have tax advantages, and which one’s right for you depends on a lot of things. But the key idea is that these portfolios grow in a tax-advantaged way over time.”

7. Fully commit to investing and have patience 

The best investment strategy is to have patience, don’t make emotional decisions, and stay focused on the big picture—not just changes that can happen week to week. The longer you leave your money in the market means the more time it has to grow. For example, if you had invested $1,000 in Amazon's IPO back in 1997 and held it until today, that $1,000 would’ve turned into $1.6 million. 

8. Find community

“For so many women, money instills feelings of loneliness. But money is a mechanism for personal agency, so it’s hard to be in control of one’s own life if you don’t have control over your money,” Rogers says. “It’s time to flip this idea on its head and build a community around investing. This can be as simple as having a dialogue with friends about what they’re doing with their money, or could be a more formal approach, like an investing circle.”

While Rogers says “the best time to invest was yesterday,” what she means is that it’s never too late to start. With the right knowledge, support, and guidance, women can start building both their investment portfolios and financial security, for now and years to come.