Where to invest and how to maximize returns

Women investors are gaining confidence and strengthening their strategies by taking more risks. However, they are still inferior to men in terms of the amount of money they work in the market.

But women are expected to receive an influx of wealth as part of what has been called a “great wealth transfer.”

Cerulli Associates predicts that by 2048, $105 trillion in wealth will be passed on to heirs, with about $54 trillion of that going to spouses. According to the Centers for Disease Control and Prevention, women live on average nearly six years longer than men. As such, they are more likely to be the primary recipients of that wealth.

“We’re about to see this big shift in who controls wealth,” said Stephanie Link, chief investment strategist and portfolio manager at asset management firm Hightower Advisors.

According to McKinsey & Company, women will hold $18 trillion in investable assets in the U.S. in 2023, accounting for 34% of assets under management. This number is expected to nearly double to $34 trillion by 2030, representing about 38% of total U.S. wealth, the consulting firm said.

Wealth transfers are one way to narrow the gender investment gap, but women still earn less than men in the workplace. According to the National Women’s Law Center, women employed full-time in the United States are typically paid 81 cents for every dollar earned by men.

Veronica Willis, global investment strategist at Wells Fargo Investment Institute, said this has led to a gap in retirement savings. Ms. Willis is a co-author of the firm’s 2025 Women and Investing report.

“There are signs that the gap is starting to close, but there is still work to be done,” he said.

According to Wells Fargo research, women are more likely to describe their investment approach as conservative.

Link said she sees her female clients not focus on being violent. S&P500 And in return, they want to preserve the wealth they have.

“We’ve seen improvements in terms of more sophistication, but we still have a long way to go,” Link added.

In fact, Willis said, women have become a little less conservative these days and are actually taking a little more risks. They are also becoming more confident in their investment abilities, she noted.

About 71% of women say they will invest in the stock market in 2024, up from 60% the year before, according to a Wells Fargo survey. Gen Z and Millennials are leading the way.

In fact, the firm’s analysis found that the performance of single women and female-led accounts over a seven-year period was similar to the performance of single men and male-led accounts. But women-led accounts had the highest risk-adjusted returns, Willis said.

“Women tend to be less likely to check these accounts on a daily basis, which means they are less likely to make as many transactions,” she explained. “A willingness to stick to an investment plan works in their favor.”

Investors need to evaluate their goals and understand how to invest, Willis said. And you need to make sure you have the right allocation in your portfolio so your investments grow over time, she noted.

“Make sure you own a good mix of stocks, as well as assets that can diversify your stock risk a little bit,” she said. “When it comes to your retirement bucket, resist the urge to fly to a safe haven and hold on to cash or all bond-type assets.”

Shannon Saccocia, chief investment officer at NB Private Wealth, likes to break it down by age group.

She said women should start investing early, and in their 20s and 30s should focus on the discipline of developing good financial habits.

By the time they’re in their late 30s or 40s, they should have started accumulating some wealth, she noted.

“But they should also consider incorporating broader financial advice, such as not only how to allocate their 401(k) and optimizing their savings, but also understanding that the working capital generated by working is a meaningful input into the financial equation,” Saccocia said.

That includes questions about workplace compensation and how best to diversify stock ownership, she noted.

Later in life, a woman should be honest about what she wants, both during and after her life.

“Who will carry on their legacy? How do they think about the balance between lifestyle, philanthropy and intergenerational wealth transfer? These should be clearly articulated as part of the conversation with advisors,” Saccocia said.

For Hightowers Link, education is key. Start by reading books, finding an advisor who can help you reach your goals, and talking to other women, including mahjong and investment groups, she said.

The best advice she got for someone wanting to start investing came from her father right after graduating from college in 1992.

“You start investing very early, and when you’re young you can take more risks…You want more equity exposure than bond exposure,” she said. “I’m thinking of starting dollar-cost averaging.”

Dollar-cost averaging allows investors to build positions at different prices over long periods of time. He said investors can withdraw a certain amount ($10, $50, even $100) directly from their bank account and place it in an exchange-traded fund (ETF) that tracks the S&P.

If you have a 401(k), you can withdraw funds directly from your paycheck.

“You’ll never miss it. Over time, you’ll be very grateful and very grateful that you did this because you can’t time the market,” Link said.

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