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Women are better investors than men. Show your skills in a Stocks and Shares ISA

Women are catching up with men in so many areas, but in one important respect they’re still way behind, and this will ultimately cost them dear.

They just aren’t that into investing. At least, not as much as they should be.

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Mind the gender gap

There are strong historic reasons for this. Men earned more, had more money to invest, and took manly control of that side of the family finances. The result is the investment industry is still a bit of a boys’ club today.

I see endless research showing the unhappy result. Women invest less, have smaller workplace pensions, and are more likely to struggle financially in retirement.

Interactive Investor is the latest to highlight the problem, as its research shows that just 17% of women are confident they will be able to maintain their standard of living in retirement, against 30% of men.

The pension gender gap is real and quantifiable. Women in their 60s have an average of £51,100 in their private pension pots while men have £156,500, according to the Pensions Policy Institute. This is primarily because women stop work to raise children or care for relatives, while men do not have those interruptions.

Male and stale

I also think that some women see investing as a bit boring.

Interactive Investor’s research shows that 34% of women find money management a chore, compared to 15% of men. The result is that 48% of men invest in a Stocks and Shares ISA, but just 18% of women. Salary differences play a big part, but this is also an attitude thing.

This has to change. Unless women also get switched on to investing, they will continue to find retirement tougher than men do.

Now plenty of women do like investing. Fiona Leake can be found tipping the rising RBS share price on these pages, while Kirsteen Mackay sets out a strong case for why BP can overcome climate change pressures.

Women do this better

Here’s another reason why more women should invest. They are better at it than men. In 2017, fund manager Fidelity trawled through more than eight million customer accounts and found that on average, women generate 0.4% a year more than men.

That may sound like a tiny difference but if you have £100,000 invested and it grows at an average 5% a year, you will have £432,194 after 30 years. If it grows at 5.4% you will end up with £484,416 – that’s £52,222 more.

Women tend to be more patient, while men rack up loads of dealing charges by trading too often, and these eat away at their profits.

A study by Warwick Business School showed an even bigger performance gap, with men beating the FTSE 100 by just 0.14% a year on average, and women by a thumping 1.94%. Apparently, men are too emotional. Seriously. We get way too excited about risky, speculative stocks that too often crash and burn, while women wisely shun such masculine short-termism.

So please, women, get into investing. If you’ve got a talent, you really should use it. It will make you richer. You might even enjoy it.

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According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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