Who Are the Best Investors? Your Guess Is Probably Wrong

Businessman lighting a cigar with money
Photo by aastock / Shutterstock.com

Despite an apparent lack of confidence in their investing abilities, women tend to earn higher returns on their investments than men do.

A recent survey found that only 9 percent of women believed female investors would have outperformed men last year. Yet women’s returns (6.4 percent) beat men’s (6 percent) by an average of 40 basis points — or 0.4 percent — in 2016, according to Fidelity Investment’s analysis of 8 million retail customers.

Women also saved more money than men last year. Fidelity found that women saved an annual average of 9 percent of their paychecks in workplace retirement accounts, while men saved an average of 8.6 percent.

Women also saved more money outside of workplace retirement accounts, such as in individual retirement accounts and brokerage accounts. They added an average of 12.4 percent of their account balances, while men added an average of 11.6 percent.

Each of these differences between genders might seem negligible on its own, but the combination of even minor increases in savings rates and investment returns over time can make a significant difference in the size of your nest egg at retirement.

Fidelity found that a woman who saves 9 percent of her paycheck and generates a 6.4 percent annual return rate would have anywhere from 8.4 percent to 15.4 percent more in retirement savings by age 67, depending on her income and when she started investing, when compared with a man who saves 8.6 percent of his paycheck and generates a 6 percent annual return rate.

Fidelity is not the first to find that women tend to be better investors than men.

Last year, the online-based investment adviser SigFig Wealth Management found that women’s median rates of returns had outperformed men’s returns by 40 basis points as well. That was based on a review of more than 50,000 accounts, compiled for CNBC.

SigFig’s findings were attributed to men trading more than women — by about 30 percent — and therefore paying more in fees.

CNBC cited reactions to stock market tumbles as an example of why women out-invest men. Tumbles prompt panic and selling, but generally prove short-lived. So investors who don’t panic and don’t trade out of that panic are generally rewarded.

As we note in “11 Tips for Sane, Successful Stock Investing,” reacting emotionally to stock market ups and downs is a rookie investing mistake:

“Remember: You are in this for the long haul.”

What’s your take on differences between men’s and women’s investing patterns? Sound off below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

7 Social Security Blunders That Can Ruin Your Retirement
7 Social Security Blunders That Can Ruin Your Retirement

Making even one of these mistakes can easily cost you tens of thousands of dollars.

17 Home Maintenance Tasks That Save You Money
17 Home Maintenance Tasks That Save You Money

Here’s how to cut household costs and maintain your property’s value.

7 Tips for Building an Emergency Food Supply
7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

3 Ways a Health Savings Account Can Improve Your Finances
3 Ways a Health Savings Account Can Improve Your Finances

Open an HSA in minutes to help you save on taxes, cover medical expenses and grow your retirement nest egg.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?
Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

Seniors With COVID-19 May Display This Unusual Symptom
Seniors With COVID-19 May Display This Unusual Symptom

Largely asymptomatic seniors may experience a symptom not commonly associated with the coronavirus.

These Are the 10 Worst Cars for Depreciation
These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

18 Early Black Friday Deals on Amazon Today
18 Early Black Friday Deals on Amazon Today

These items are all steeply discounted — but the deals won’t last long.

Never Buy These 10 Things With Your Credit Card
Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

13 Amazon Purchases That We Are Loving Right Now
13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

10 Things I Always Buy at Trader Joe’s
10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

8 Surprising Household Items You Can Sell for Fast Cash
8 Surprising Household Items You Can Sell for Fast Cash

Sometimes, the humblest household items are worth the most money.

Cut These 11 Expenses Now If You Hope to Retire Early
Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

5 Ways Social Security Will Change in 2021
5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

Stop Buying These 19 Things Online
Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

15 Products You Need — Even If You Didn’t Know It
15 Products You Need — Even If You Didn’t Know It

Discover some must-have products on Amazon that you didn’t even know you were missing.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

8 Things You Should Buy at Restaurant Supply Stores
8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.