Femme fatal? The investing gender divide costing women

Almost half of women don't invest at all, and that's only the start of the story.

It's fair to say investing has a heavy male-skew. From Hollywood down it's very much a man's world in both perception and, unfortunately, in reality.

A new survey conducted by trading platform moomoo and YouGov found millennial women were half as likely to be "very comfortable" investing than men.¹

In fact, almost 30% of women were not comfortable investing in shares at all, and 1 in 5 wouldn't invest even if they had the funds to do so.

Finder data backs this up - we've found 46% of women have no investments at all (outside superannuation), compared to only 26% of men.²

Only 1 in 4 women have invested in stocks, and only 13% in ETFs (exchange-traded funds).

And the upshot of this is startling. Women earn 22.8% less than men on average, and retire with 25% less super than men³, which already leaves them at a big wealth disadvantage.

So the fact they're also more reticent to invest means they are falling even further behind.

But what explains this stark gender divide - and what can be done to level the playing field?

Why aren't women investing?

Jessica Amir, market strategist and financial educator, says a lack of confidence and experience is often what's holding women back from getting started with investing.

"When we speak to potential stock investors there is a significant difference in the feedback from men and women, especially amongst those that have never invested in stocks before," said Amir. "Women often don't feel as confident as men, or feel they have enough money. If they do want to invest, they may not feel skilled in what to invest in."

Part of this is a simple lack of knowledge.

"The Australian education system doesn't traditionally guide young people on how to grow their wealth," said Amir. "In high school economics we learn about the role of interest rates (monetary policy) and its role to either restrict or encourage us to spend."

"We also learn about tax, and government policy at school, but we are not taught about what to do with our own money or how to grow it."

moomoo's survey backs this up, with 70% of women reporting they wanted more financial literacy education at school.

How to get started investing

Like going for a swim on a crisp day, sometimes it's best to just take the plunge.

"By starting out small and investing regularly, [women] can build their confidence and grow their wealth. It doesn't take long for investors to feel empowered, and wish they'd started investing sooner," said Amir.

And the sooner you start, the better off you're likely to be.

Time in the market beats timing the market, as the old investing adage goes.

Someone who had invested $1,000 into the Nasdaq-100 (a popular stock index) 20 years ago, would have $14,500 now.⁴

If they had also invested an extra $50 a month over that time, they'd now have over $85,000.

But if they had waited another 5 years to start investing, they'd only have $45,000 instead, a difference of $40,000.

So how do you invest? Amir says letting go of any fear or uncertainty is the best place to start.

"The first thing is to understand that it's not scary, it's empowering! There are tools like education modules and paper trading on the moomoo app to build your confidence," said Amir.

Once you've conquered any lingering fears, the next step is starting small. Investing has never been more accessible, affordable or convenient, and once you commit you'll likely find the process relatively stress-free.

"You can invest with as little as $5 these days, and with automatic top-ups and dividend reinvestment programs, it's an opportunity to set and forget."