New female investors soared by 354% last year!

The latest data shows that the number of new female investors has soared in the last year. We take a look at some possible reasons why.

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The world of investing has traditionally been dominated by men. But in recent times, the number of female investors has been on the rise. Indeed, according to online trading and investment firm Saxo Markets, the number of new female investors has risen significantly in the last year.

Here’s the lowdown. 

[top_pitch]

What’s going on with new female investors?

According to Saxo Markets, the number of new female investors 354% in 2020. In comparison, the number of new male investors grew by 288%. That’s a difference of 66%.

But which companies are most women investing in? According to the stats, electric car maker Tesla has been the top investment choice for women in the last year.

Other major companies that women have invested in include:

  • Apple
  • Nio
  • Alibaba Group Holdings Ltd
  • Microsoft
  • Gamestop 
  • AMC Entertainment

Why do women generally invest less than men?

Research shows that women are less likely to invest in financial markets than men, with only one in five women investing, versus one in three men. This is likely due to a number of factors.

One is the gender pay gap, which often leaves women with less disposable income than their male counterparts. Less pay means less financial security. Women are more likely to protect their financial wellbeing rather than try to grow their money.

Another factor is that many women are reluctant to invest because they see investing as involving too much risk.

Lack of knowledge and confidence has also been found to hold women back when it comes to investing. For example, in a research carried out by YouGov, 45% of men said they would feel confident investing some of their money. The figure drops to just 28% for women. Furthermore, twice as many men (26%) as women (13%) said they believe they have a good knowledge of investments and the stock exchange.

However, things are changing, as the data from Saxo Markets reveals. If the current rate of new female investor growth is maintained, it will not be long before the existing gender gap in investing is closed.

[middle_pitch]

Men vs women: who are the better investors?

Interestingly, although there are fewer women in the market than men, numerous studies have shown that women tend to outperform men when it comes to investment returns.

This is primarily because women:

  • are generally more risk-averse than men. Women tend to focus on tried and tested investment products with a good track record.
  • focus more on long-term investment and generally trade their shares less than men. This has the dual effect of lowering trading costs and eliminating the risk associated with trying to time the market.
  • spend more time doing research on investments than men.

Bottom line

Investing in the stock market, even in small amounts, is one of the most dependable ways of building wealth and achieving financial independence. It’s therefore encouraging that more people, particularly women, are becoming aware of this, as evidenced by the latest Saxo Markets statistics.

If you are completely new to the world of investing, you should check out our investment guide for beginners.

And if you are already familiar with this concept, check whether you can get more out of your investments through a tax-efficient vehicle like the Saxo Markets stocks and shares ISA. The beauty of a stocks and shares ISA is that it comes with a tax wrapper that essentially protects your investments from both income and capital gains tax.

Keep in mind, however, that tax rules can change and that tax treatment will depend on your individual circumstances.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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