Are Women Better Investors? Stash Data Flips Gender Stereotypes

The gender gap is real—and not only when it comes to how much money men and women earn. It applies across a wide spectrum of the financial world.

Men tend to score higher on financial literacy tests, for example. But women generally have a more practical approach to money, viewing it as a tool to take care of their families, more so than their male counterparts.

There are numerous theories about why there’s a gender divide when it comes to finances.

Money, traditionally, is seen as a man’s domain. Less than 20% of those in leadership positions at investment banks are female, according to industry data, and women make up only 9% of senior executive positions at private equity firms.

But what about when it comes to investing, specifically?

Stash’s data team took a look and came away with some interesting discoveries that may upend some of the preconceived notions and stereotypes about money and gender. We analyzed self-reported responses from 640,000 Stash users (defined as individuals who have a personal invest account) in the first week of August 2018. The sample group was roughly one-third women and two-thirds men. As a side note: Stash has more male than female customers.

Here’s what Stash found, based on customer responses.

Women view themselves as more risk-averse…

Nearly 90% of female Stash users self-identified as having a low or medium risk tolerance when they first open an account, compared to 75% of men. This means that female Stash users perceive themselves as less willing to make riskier investments, opting for less volatile stocks and ETFs—they want safer investments, in other words.

… but actually, they’re not

The data, however, reveals that female users are just as likely as men to take on investment risk. Roughly 50% of women have invested in higher-risk investments on Stash—the same as men.

So, while women may view themselves as more conservative investors, in practice, they’re not.

Women want to learn

When it comes to improving their financial acumen, women are just as eager as men to learn more.

Stash’s data team asked the same sample group how many articles they read on StashLearn, our financial education site. We found that men and women consume roughly the same amount of educational content, reading three to four articles per day on average.

Women keep their cool, fellas freak out

Our data experts also uncovered big differences between male and female Stash users when the market becomes volatile.

The team examined user behavior on two particularly volatile days for markets in 2018—February 5 and 8—when indexes such as the S&P 500 suffered big losses, moving into correction territory.

It turns out women acted more sensibly on turbulent days.

When Stash dug into the numbers, we discovered that it was male users who panicked. Men were 87% more likely than women, on average, to sell an investment.

And that behavior continued into the following week, with male users still being 76% more likely than women to sell an investment, compared to female users.

By selling after a market drop, men effectively locked in their losses. The market has since recovered.

Women are listening

What does the above tell us?

Here at Stash, we preach investing for the long-term and holding steady through market drops.

Contrary to stereotypes, and despite consuming roughly the same amount of educational content on StashLearn, male users were more prone to making emotional or panicky investing decisions during market turbulence.

In short, it seems women are more likely to listen to sensible and time-tested financial advice and stay the course. Men are more likely to pull the trigger and sell when their money appears to be at risk.

Stash is leveling the playing field for female investors

It’s time to quit listening to the stereotypes about gender and investing. Every day, women are entering the market, making choices, and riding out market highs and lows.

Get off the sidelines. Build up your financial education and confidence with StashLearn, grow your know-how.

Investing isn’t a man’s world. It’s everyone’s world.

Plus, you can get started with just $5.