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Who Invests More: Men or Women?

For a long time, this question about who invests more, whether men or women, could be answered a priori thoroughly. Undoubtedly it was the men.

It is until the beginning of the twentieth century that most women were kept out of financial decision-making, as well as from high-income jobs, with very few exceptions.

This is still the case in some societies today, with women’s participation in the economy being limited to issues such as food, clothing, education or some real estate issues. Let’s see more details.

Until recent dates, only a few women could be called investors, properly speaking. This situation has begun to change and is changing, fortunately; but it is still a rather slow process.

Thus, although there are already more professional women, even occupying senior managerial positions, they are still not in the same proportion as men. According to a study on the topic, only 20% of CEOs are women.

On the other hand, although the percentage is also low, steps have been taken in the finance sector, and there are more and more cases of female investors, proving to be qualified for these tasks

Of course, there is also a big difference between the two genders in this area. In this regard, an investigation outlined on the page DW notes that about 27% of men invest in stocks, funds or other securities and in the case of women, only 18% do so.

In particular, it is detailed that of twelve million people who placed their money in stocks or index funds in 2021, eight million were male and four were female.

We can say it in a simple equation, by way of partial conclusion: one in three investors are women. And there are countries like Mexico where the proportion is even lower: only two out of ten, according to a report by GBM.

Why do men invest more than women?

Apart from those already mentioned, other factors tip the balance concerning the fact that men invest more than women. One of them is very important: the wage gap.

In an article published on the UN portal, it is pointed out that on average women get paid about 20% less than men, even when faced with tasks of equal value or in positions of similar functions, according to data provided by the International Labor Organization. These figures correspond to the global average. However, there are countries where the gap is even more noticeable.

The problem is not only the average but, for example, in Mexico, the majority of women earn relatively low wages (up to 70%); and few grow professionally, in the sense of being promoted to decision-making positions and with better salaries, according to the Center for Research in Public Policy.

Additionally, a high percentage of women are economically inactive. Following the same case of Mexico, more than half (54.9%) are in this situation, where they do not earn income or manage their own money, but are engaged in household chores, raising children and managing the common wealth.

As a result of the above, savings capacity is lower, as is the availability of money for investment. In this context, it is not surprising that those who invest more are men, before women.

A third factor linked to this inequality has to do with the fact that there are sectors of activity traditionally dominated by men. And finance is one of them, even today.

But there are still more reasons that explain the differences between both genders in terms of the amount to invest or even the fact of investing or not. In this sense, another of the associated circumstances, this time of a cultural nature, has to do with the self-perception of roles.

According to neurofinance specialists, regarding its structure, values and philosophy, the financial system and the world of investments in general responds to a logic and a way of seeing the world that is rather masculine.

This would explain certain situations present in finance, related to taking risks, and the need to compete with other rivals and overcome them, where men’s higher testosterone levels would have some influence.

In another order of ideas, there are cases in which for reasons of their religious, family or cultural background, some women voluntarily give up decisions to their husbands as to what to do with the family estate.

In this regard, according to a 2019 study, also cited by DW, this is true for almost two-thirds of the female population. That is why it is understood that apparently, women are far below men in terms of participation and investment figures.

However, this last data may make us think that some figures would be invisible, misleading or difficult to elucidate. Because although the man makes the decision to invest, and nominally he would appear as the holder, there is also part of the woman’s patrimony invested there.

Different styles for investing

In the current times, new ways and modalities of investing are emerging. In this context, there are qualities of women that can become strengths. For example, greater prudence is a tool that favors risk management and long-term investments, usually more conservative, to maintain the estate and ensure financial peace of mind.

Another quality that stands out in them is their tenacity to pursue the investment strategy consistently. Therefore, the real estate sector may be attractive to them, as well as funds and others in which a periodic income is obtained, compared to stocks and currencies, which are often more volatile markets.

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