Why are women not engaging in the stock market?

International Women’s Day on the 8th March was an opportunity to raise the profile of women’s issues and celebrate the contribution they make to society. Since a fairly young age, I’ve been interested in personal finance; in a recent survey, I rated my financial knowledge as 8 out of 10, indicating a high level of confidence. In that same survey, women were rating their level of financial knowledge as just 4 out of 10.

As a result, I took the opportunity to ask a few of my female friends how they rated their own levels of financial knowledge. Although not uniform, the highest result came in at just 7 out of 10, with the majority coming out at 5 or lower. When I asked them why I got a range of answer including;

  • A dislike of jargon and a perception of complexity
  • A lack of time
  • A feeling that investments were essentially gambling

This was really interesting to me, as I highlighted the great returns I’d received from investment and asked them if I could do it, why couldn’t they? Without exception, they all agreed that they could – none of them believed that gender was a differentiator in this arena – but none of them was actually investing in the same way that I do.

I suggested that perhaps it was a feeling of exclusion. Did they feel that the industry was male-dominated and that they had no connection with a white, middle-aged man telling them how to handle their investments? (Interesting, those of you that read this blog regularly will know that I am no fan of investment advisors, so feel no particular ‘affinity’ with the people in the financial management industry).

Interesting, recent studies have shown that fewer women than men have a stocks and shares ISA and in addition to this, the ones they do have a less-well-funded. There are numerous potential reasons for this from childcare costs to lower salaries to career breaks, but fundamentally, I believe that fewer women feel financially empowered than men.

To try and correct this, I told my friends that they could start investing from just a few pounds a month. There are a whole host of robo-advisors and low-cost tracker funds that would get them access to the markets. Why should they let fear of the unknown or subconscious bias stop them from accessing them same gains that I do?

I’m not a financial advisor and I’m not a societal expert. But surely more women taking control of their financial futures can only be a good thing! If you’re reading this blog and find value in it, take a moment to forward it to a lady you know could benefit. Hopefully, like you, it will inspire them to take control of their financial future!