Are Women Investors Risk Averse?
It is commonly believed that women are generally more conservative in their investment decisions and tend to be more risk-averse than men. Numerous studies support this viewpoint. But is this fact or common belief? There are various perceived factors supporting this theory. The most common being -
Women feel the pain of loss more than men when faced with risky choices (acc. to a study conducted at Univ. of Bath) – This might be a major reason for the difference in risk appetite, and hence women are less likely to invest their wealth in equities markets than men. The study found that income losses are less painful for men than for women, with no difference in the psychological responses to income gains between the sexes.

But how does it translate to investment philosophy? Being risk averse also means
- Women are less likely to hop onto investing trends. For e.g., women investors form a smaller no. of cryptocurrency investors. (as shown in multiple surveys)
- Women are less impulsive – most women prefer long term investments, which means they invest for the longer haul and, by virtue of number of years, end with better results.
- Women are less active – A University of California, Berkeley study showed that women traded 45% less frequently than men. This clearly shows they hold on to their investments for a longer duration and don’t make frequent changes to their portfolio.
- Women investors don’t join trends -This clearly shows women may prioritize financial security and long-term stability over high short-term returns, which might lead them to avoid high-risk investments
CHANGING TIMES

As times change, more and more women are investing. This is especially true for the younger generation. The number of women who are investing is growing rapidly. A Fidelity report shows that 71% of women invest in the stock market, a big jump from previous years, and the younger generations are leading the way. Among them, 77% are of Generation Z and 74% are millennials. They also invest a significant amount (approx. 10%) of their income.
Another important aspect is that the investing age is getting younger. Fidelity reports that the average age of opening a brokerage account is 21 and retirement account is 20 among the age gp of 18 to 35. Comparing that to the average age of brokerage account is 30 and retirement account is at 27 for women who are 36 or older. This shows a clear shift in the thinking and investment philosophy of women. These extra years make a massive difference in returns due to compound interest.
However women are still at a disadvantage because of the gender pay gap and fewer women in the world of finance. This can mean that women may prefer more stable, lower-risk investments, such as bonds, or may opt for diversified portfolios with less exposure to volatile assets like stocks, crypto, etc. But to be more successful in investment, women should
- Start young – women have longevity risk as they, on average, live longer, so they should plan their finances carefully.
- Understand Asset allocation by age – which assets should be focussed on depends on your retirement goal. So they should plan accordingly. Stocks make sense at a younger age but as retirement draws closer, bonds, etc can be considered.
But it’s important that women invest intelligently and grow their assets confidently.