Image source: Getty Images

It's high time we spotlight a topic that, while making strides, still shows a considerable gap: the gender investing gap. For too long, the narrative has been skewed, painting a picture that investing is a man's game.

In fact, did you know that according to a study from UBS Global Wealth Management, a whopping 58% of women leave the big financial decisions to their male partners? Yeah, you heard that right. And it gets even more interesting.

For the younger crowd, those between 20 and 34 years old, the number is slightly lower but still significant at 56%. Meanwhile, women over 50 aren't too far behind, with 54% letting their spouses take the financial reins.

But here's the kicker: life has a way of throwing curveballs, and at some point, many women will find themselves navigating finances alone. Whether it's through never marrying, divorce, or widowhood (the average age for which is 59, according to the Census Bureau), a lot of us will need to manage our money solo for possibly decades.

Yet, when women take the reins on their investment decisions, the landscape not only shifts but flourishes. So, why does this matter? Well, because when women do step into investing, they tend to knock it out of the park.

Women investors consistently earn higher returns than men

It's fascinating how studies keep showing that women are outdoing men when it comes to investment returns. So, how much better are they doing, you ask?

Well, let's break it down with the help of data about women and investing collected by the Motley Fool. Fidelity analyzed about 5 million of its customer accounts over 10 years and found that women were ahead by 0.4%. That might sound small, but it's a big deal in the investment world. And then there's this study from the University of California, Berkeley, back in the '90s, that showed women pulling nearly a 1% lead over men in investment performance.

And to add a cherry on top, a study by Wells Fargo covering a decade up to 2022 showed that women weren't just beating men in the returns game, but they were doing it by taking on less risk.

Why women are better at investing

Ever wonder why women often see better returns on their investments than men? There isn't a one-size-fits-all answer, but a mix of traits could be tipping the scales in women's favor.

Women are more conservative investors

Overall, women adopt a more conservative or moderate approach to investing compared to men, who tend to take a more aggressive stance. And while guys might chase at the latest buzz, like everyone's new favorite, cryptocurrency, women tend not to jump on the bandwagon as quickly and have more stable brokerage accounts.

Women investors are less impulsive

Embracing the long-term view and resisting impulsive decisions marks a winning investment strategy. Here, women seem to have the edge. They're more likely to keep their cool when the market gets rocky. Fidelity noted that 51% of women would rather wait out market turbulence than 43% of men. Men are also more prone to adjusting their investments during these times, both increasing and decreasing, more so than women. The advice often given is to stick to a consistent investment plan, since market timing is notoriously tricky. Commit to a certain amount of cash set aside in your budget to contribute to your investment account.

Moreover, Vanguard observed that women check their accounts far less often than men and trade 44% less frequently. A study from the University of California, Berkeley, backs this up, showing women traded 45% less often than men. This difference in trading frequency underscores a less impulsive approach and translates to better annual returns for women.

How to start investing

Acknowledging obstacles such as confidence gaps, limited financial literacy, and enduring stereotypes is the first step toward dismantling them. Here are some tips for women aiming to conquer these challenges:

• Break down financial goals: Start by setting clear, achievable financial goals. Whether you're saving for retirement, making a down payment on a house, or creating an emergency fund, knowing what you're working toward can help you stay focused and motivated.
• Embrace financial education: Commit to learning about investing. Resources abound, from online courses to financial podcasts. The more you know, the more empowered you'll feel to make informed decisions.
• Start investing now: Don't wait for the "perfect time" or until you have a "sufficient amount" to invest. Even small, consistent investments can grow significantly over time thanks to compound interest.
• Find a financial buddy: Partner with a friend who shares your financial goals. This partnership can offer mutual support, accountability, and encouragement to take bold steps in your financial journey.
• Consult a financial advisor: A professional can offer personalized advice tailored to your financial situation and goals. Don't shy away from seeking help when making significant financial decisions.

By tackling the gender investing gap head-on and empowering women with the tools, knowledge, and confidence to invest, we can shift the financial landscape toward greater equality and success for everyone. Remember, the journey to becoming a savvy investor begins with a single step. Let's make that step count.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.