Women generally invest less in stocks than men do - Men demonstrated a higher propensity than women to engage in stock market investments.
In a recent survey commissioned by the German Press Agency and conducted by YouGov, it has been revealed that men are more likely to invest in stocks and funds than women. The survey, which was representative and carried out in Berlin, found that overall, about a third (33%) of respondents invest in stocks or funds. Among these investors, 43% were men, compared to 24% of women.
The difference between men and women investing in stocks or funds has remained relatively stable over the years, according to Gerrit Fey, the chief economist of the German Institute for Securities Research. Among female participants, 42% even rate their knowledge of stocks and funds as poor.
One of the key reasons for this gender gap in investing is lower participation and confidence. Data from the UK shows that only 29% of women report trading stocks and shares online, compared to 47% of men. Men tend to have higher self-perception when it comes to investment decisions, often viewing themselves as more capable in financial matters compared to women.
Another factor contributing to the gender gap is disparities in financial literacy and socialization. Women, on average, may have less access to formal financial education and are less likely to be encouraged to engage with investing from a young age. This can result in lower confidence and less engagement with markets.
Structural and economic barriers also play a significant role. Persistent wage gaps mean that women often have less disposable income to invest. Decades of pay inequity translate directly into lower savings and investment contributions, reinforcing the cycle of financial underrepresentation.
Interestingly, women who do invest often outperform men, partly due to more cautious, research-driven approaches and less overtrading. Despite these efforts to improve financial inclusion for women, significant disparities remain.
The summary table below provides a comparison between men and women in terms of participation in stocks/funds, self-perception/confidence, risk tolerance, and median retirement savings.
| Factor | Men | Women | |-------------------------------|------------------------------|------------------------------| | Participation in Stocks/Funds | Higher (e.g., 47% in UK) | Lower (e.g., 29% in UK) | | Self-Perception/Confidence | Higher | Lower | | Risk Tolerance | Higher | Lower | | Median Retirement Savings | Higher (e.g., $157,000 US) | Lower (e.g., $50,000 US) |
Addressing these gaps requires targeted efforts to boost financial literacy, confidence, and access to investment opportunities for women. The German Institute for Securities Research conducts an annual representative survey on investment habits, aiming to contribute to this ongoing effort.
[1] Kantar YouGov. (2021). Women and Investing: The Gender Gap in Financial Literacy. Retrieved from https://yougov.co.uk/reports/2021/03/15/women-investing-gender-gap-financial-literacy [2] OECD. (2019). Women, Men and Finance: Making the most of the opportunities. Retrieved from https://www.oecd.org/finance/women-men-and-finance-making-the-most-of-the-opportunities.htm [3] World Economic Forum. (2020). Closing the Gender Gap in Financial Education. Retrieved from https://www.weforum.org/agenda/2020/08/closing-the-gender-gap-in-financial-education/ [4] AARP. (2019). Women and Retirement: A Retirement Savings Crisis. Retrieved from https://www.aarp.org/retirement/planning-and-advice/info-2019/women-retirement-savings-crisis.html
Community policy should be developed to address the gender gap in investing, particularly focusing on increasing financial literacy and investment opportunities for women. Vocational training programs in personal-finance could be incorporated into community initiatives to empower women with the necessary skills and knowledge to invest.
To ensure that these initiatives are successful, it may be beneficial for the German Institute for Securities Research to collaborate with financial institutions and organizations that offer vocational training in personal finance. By investing in this education, we can contribute to bridging the gap between men and women in terms of investment participation, self-perception, risk tolerance, and retirement savings.
