Gender Investing Gap – Should Women Invest Differently?

Deborah Gan

Deborah Gan

Last updated 30 March, 2022

Are women investing less than men because they are perceived to be more risk-averse? Not entirely. Here’s all you need to know about the gender investing gap — we’ve also included investing tips for the ladies at the end to build confidence in investing.

As someone who’s in her early 20s, I can safely say that a majority of my circle of friends have already dabbled in investing — be it through a recommendation by a financial advisor or on their own. In this day and age where information is at our fingertips, there is no doubt that most people seem to be equipped with some degree of investing knowledge, from as young those in their mid-teens.

However, taking a closer look, there seems to be a gender investing gap between males and females. According to a global independent study, females are investing much lesser compared to their male counterparts. Is it due to their risk-averse nature? Or could it be attributed to the still-prevalent income gap in our society? Should women then take a more aggressive approach when it comes to investing?

Here’s a lowdown of the reality of the gender investing gap, and some investment tips for the females who need a little confidence boost.

EDM Lead Gen

Start managing and saving money like a pro with SingSaver’s weekly financial roundups! We dole out easy-to-follow money-saving tips, the latest financial trends and the hottest promotions every week, right into your inbox. This is one mailer you don’t want to miss.

Sign up today to receive our exclusive free investing guide for beginners!

Is there a gender investing gap?

You may ask, what is a gender investing gap? To put it simply, it refers to the number of females versus males who are investing their disposable income. Across different investment types and asset classes, statistics show that women are investing less. According to Business Times, women hold around 71 per cent of their wealth in cash as compared to 60 per cent for men.

However, one interesting finding from a 2021 study by investment fund provider Fidelity revealed that female retail investors were consistently outperforming the males by an average of 0.4 per cent every year. And yet, only nine per cent of those surveyed said they thought women were better at investing than men.

Why do women invest differently?

So this begs the question: Why do women invest differently?

Ask anyone and the answers would probably throw up stereotypical assumptions  — that females tend to be more risk-averse while males are generally more risk-takers, resulting in women investing less. 

The Business Times conducted a study and their results suggest that women are more aware of risks, but wrongly classified as “risk-averse”. The females that were surveyed invest less frequently and also redeem less often, even during market dips and volatility.

Women are also believed to take a longer-term approach to investing, meaning they are less inclined to make investments that guarantee short-term rewards. Instead, they are more goals-orientated when it comes to investing. Women hence respond better to digesting the risk-reward trade-offs and would only invest if it aligns with their long-term financial goals. 

Females tend to want all the information before making an investment, rather than relying on gut feeling. Aside from that, their investment patterns are actually quite similar to their male counterparts. Their investments are also done with a high degree of confidence since their research has granted them sufficient risk analysis. 

These reasons are probably why women are more often seen to avoid risks and invest differently. However, this careful approach seems to work in their favour since women typically enjoy a 2% higher ROI than men, according to BCG, and have been proven to be more successful than men.

Find the best brokerage account to match your investment needs.

Do women need to invest differently?

Ideally, we would be living in a  world where women and men are not viewed or treated differently. However, the sad reality is that women are, in some ways, still disadvantaged when it comes to certain issues. This is why women need to invest differently to achieve their financial goals, regardless of circumstances. 

Do note that when we mention investing differently, it doesn’t just mean differently from the way men invest, but also from the original ways of viewing money and investing.

Firstly, there still exists an income gap between females and males, with women earning considerably less than men. According to The Business Times, women make up 51% of the world’s population but hold only about 33% of the world’s total wealth, due to the income gap. Another reason could be that men already have a higher disposable income and hence have more funds to invest, helping them earn more money. And the cycle repeats.

Because of this wealth inequality, women should step up and continue to invest with confidence to catch up in this rat race.

On top of that, women should also learn to adopt their own investment strategies because statistically, they live longer than men. According to the United Nations world data, women are expected to live about four and a half years longer than men. In Singapore, women tend to live four years longer. Though the difference is a mere four years, four years of expenses can chalk up to a significant amount.

The fact that women live longer ties in nicely with how women invest — they are usually goal-driven, meaning that they are not too incentivised by short-term high-yield investments. Women are more interested in investments that can help them meet their life goals like retirement, while men are often fuelled by the desire to simply improve their investment portfolio and performance.

Tips on investing

With all that said, many males and females, are still hesitant about entering the investment market. There’s no better time than now to start. If you need a boost in confidence, here are some tips you can try out.

Determine your investing style and risk appetite

The first thing you should establish before you start investing is to identify your investing style and risk appetite. Some investors recommend writing them down in an investment thesis, which includes your investing goals. Are you risk-averse or are you a risk-taker? Though riskier investments offer higher returns, it’s riskier for a reason, meaning less stable thatcan fluctuate greatly. 

What’s your investing style like? Do you prefer to take a dollar-cost averaging (DCA) approach by putting in money consistently? Or do you prefer to do lump-sum investing especially when the market dips? Identifying your investing style will help you narrow down the right investments so you can choose something that can match your investment needs. 

For example, if you prefer to use DCA, investment-linked policies or endowment plans force you to put a certain amount into your account each month. But if you prefer to do lump-sum investing, you should choose a more flexible investment tool like robo-advisors or stock-picking where you are free to pump in or withdraw money whenever you want.

Start early

Start early, start early, start early! This is one of the most talked-about points when it comes to investing tips, but should still be emphasised.

Starting early gives you a longer time horizon to work with. You can afford to take up higher-risk investment tools, as you will have enough time ahead of you to leverage the power of compounding.

Starting out early also means that you will have more time to research and get better at investing. Being a good investor doesn’t just happen overnight. It takes many years of research, analysis and even trial and error.

With that said, that doesn’t mean t you should commit your entire bank account to your investments. You can start off with a small amount into a safer investment tool to build your confidence and dabble with a greater amount or with a riskier investment.

Knowledge is power 

When newbie investors first get into the market, many are afraid of the risks that come with it. Yes, there are risks and you should always fully understand the worst-case scenario that can happen before committing your money to anything.

However, if you are extremely risk-averse, you can expect to only earn low returns in stable investment portfolios. If you have a long enough time horizon, you can afford to take more risks. 

That said, do consider your financial situation and comfort level. While some can afford to be risk-takers, others may not have much disposable income to cushion any losses.

Also bear in mind any short term and significant financial goals such as a wedding or buying property, whereby monetary losses can be disruptive.

Find the best brokerage account to match your investment needs.

Read these next:
How To Start Investing In Singapore: A Beginner's Guide (2022)
5 Ways To Invest Money That Are Better Than Buying Toto
7 Most Popular Types Of Investment In Singapore
Types of Ethical Investments Available For Investors
4 Singapore Business Women Entrepreneurs Share Top Finance Tips

A mahjong addict with an undying love for dogs, Deborah is always on the hunt for cheap deals because she is always broke. That is why she is attempting to be more financially savvy to be.. less broke


Use a personal loan to consolidate your outstanding debt at a lower interest rate!

Sign up for our newsletter for financial tips, tricks and exclusive information that can be personalised to your preferences!