A statue of a fearless girl is photographed with the American flag on the facade of the New York Stock Exchange in Manhattan on November 5, 2024, on the day of the 2024 US presidential election in Manhattan, New York City, USA.
Stephanie Spindel | Reuters
Aviva Mehta noticed that her husband regularly talked about money and investments in his social circles. She set out to do the same for the women in her life.
The 27-year-old started a book club focused on personal finance. This topic comes up regularly in video calls with friends. On a recent evening, the New York resident discussed investing over wine.
“Women are progressing in every way,” Mehta said. “We need to normalize it for women and not just see it as something men do.”
Women have an advantage over, and in some cases outperform, men on several measures of economic and occupational health. However, data analysis shows that women have not been able to break through the glass ceiling when it comes to stock market participation, an idiosyncrasy that supports the link to social norms and ongoing wage inequality.
Single women are more likely to own a home. Women outnumber men at all levels of higher education. This month’s report from Indeed shows that there are now more women than men in the workforce.
But JPMorgan’s analysis of federal data shows women will make up about 35% of investors by 2025. The data shows that the rate is about the same as it was seven years ago.
“We don’t encourage girls as much as we encourage boys to pay attention to money and finances from an early age,” said Jennifer Itzkowitz, a professor at Seton Hall University who specializes in gender-related issues in finance. “They’ve never been motivated or encouraged to think about it, so they just aren’t interested.”
Wage inequality and risk aversion
Part of the disparity is due to the fact that women generally earn less than men. According to the National Women’s Law Center, women earned about 81 cents for every dollar earned by men. According to a Glassdoor report released this month, the pay gap widens with age.
Experts have long said that women may be less likely to put money in the stock market because they are naturally risk-averse. Add to this the long-held conventional wisdom that money and finances are “men’s work” while women are expected to focus on family priorities like cooking and raising children.
But women are less likely to choose high-volatility investments or try to time market fluctuations, and their cautiousness toward risk may make them better investors once they enter the market, Wells Fargo noted. Research has long shown that female investors tend to outperform men on a risk-adjusted basis.
“Maybe they’re taking less risk on their accounts than men,” said Veronica Willis, global investment strategist at Wells Fargo Investment Institute. “But maybe it’s for the best.”
The ability to spot trends in consumer spending and brand adoption gives Brianna Giglio and the other women she knows an edge.
For example, an event planner based in Texas elf beauty After the cosmetics company announced plans to acquire Hailey Bieber’s Lorde brand in a short-term trade in May. Elf’s stock price rose more than 23% in the trading hours following the announcement, marking its best day ever.
“A lot of the things that are impacting the stock market are also exactly what’s happening in life and pop culture,” Giglio said. “Women do most of the household shopping, so it makes sense for them to make household investments.”
“Fill the gap”
Women’s networks are trying to bring other women into the market.
At Fordham University, hundreds of female students come to Smart Women’s Securities meetings to learn about stocks and financial statement analysis, said Rosa Romeo, a Fordham accounting professor who oversees the group. They also practice throwing stocks for the judges.
Tori Dunlap regularly shares her experience saving $100,000 on social media with her 25 to millions of followers. Dunlap also has a book called Financial Feminist and an educational program called Stock Market School for Women.
“If you’re investing, you’re automatically closing the gap that we see over and over again,” Dunlap told CNBC. “You’re actually not a statistic for women who waited to invest or didn’t invest at all. That’s powerful.”
Tori Dunlap hosts a workshop
Kariya Shanilek
The data shows that there is progress on the horizon. Fidelity found that a higher proportion of women surveyed invested in the stock market from 2023 to 2024. But despite the growth, more than half of women believed investing was scary.
Women are expected to particularly benefit from continued wealth transfers and will become an increasingly targeted customer group for asset managers. Still, the stock market will miss out on more stable inflows until the gap is resolved, Seton Hall’s Itzkowitz said.
“We’re just putting them on the back burner,” Itzkovitz said. “It’s bad for women. It’s bad for society. It’s bad for the market.”
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