From Startups to the Stock Market: How Women are Revolutionizing Investing

The gender investing gap is real—and a lack of confidence may have something to do with it. Many women assume that they lack the skills and knowledge to invest. While research does suggest that women are less confident managing their investments, data from Fidelity Investments found that, on average, they outperform male investors when they do invest. I mention this because it points to an encouraging trend. Despite societal myths, women are revolutionizing investing and leveling the playing field for the female investors who come after them.

The truth is that forward-thinking women have been blazing the trail for years. Opal Wealth Advisors is continuing that legacy and keeping that momentum going today. From startups to the stock market, here’s a closer look at how women are changing the game when it comes to investing.

A Quick Look Back at Revolutionary Women

In 1870, Victoria Woodhull and Tennessee Claflin—two sisters and women’s rights activists—made history when they opened the first female-owned brokerage firm on Wall Street. Victoria went on to become the first female presidential candidate in the United States.

At the turn of the century, other female entrepreneurs were making a name for themselves in American business. Madam C.J. Walker created a line of products that revolutionized the Black haircare industry. Walker is recognized as the first Black female millionaire, and much of her wealth was donated to causes she cared about, even after her death. (The money and impact she left behind reflected her personal values!)

Women eventually gained the right to open a bank account in the 1960s—but that didn’t completely stomp out sexist banking practices. Many banks still wouldn’t allow a woman to open an account of her own without her husband’s signed approval. Unmarried women were often turned away altogether. That changed with the Equal Credit Opportunity Act of 1974, which allowed women to independently open bank accounts and own credit cards for the first time.

How Female Investors Are Leaving Their Mark Today

Startup investing is still largely male dominated, but women are gradually earning their place at the table. As of September 2022, about 15% of general partners at venture capital firms were women, according to Entrepreneur Magazine. What’s more, women are also making up a larger percentage of angel investors. It’s also encouraging to note that female investors are more likely to invest in women-owned businesses.

When it comes to stock market investing, participation is also picking up steam among investors who identify as female. According to a 2021 Fidelity Investments report, 67% of women are investing outside of retirement. That number is up 44% from 2018. Their preferred asset classes are individual stocks or bonds, mutual funds or ETFs, and money market funds or CDs.

There’s Still Room to Grow

Numbers like these are extremely encouraging, but female investors are far from hitting their potential. As a financial advisor, I see time and time again that many women are under-invested and holding most of their wealth in cash. If inflation has taught us anything over the last year, it’s that this isn’t generally the most effective plan.

There’s a way to make your money work harder for you—so that you don’t have to work so hard for your money. The average APY on a savings account is only 0.37% as of March 20, 2023, according to the Federal Deposit Insurance Corporation (FDIC). The S&P 500, on the other hand, has had an average annualized return of over 11% for the past 70+ years, according to J.P. Morgan data.

Women are also living longer, which means they’ll likely need more money in retirement. The challenge, however, is that women are usually more likely to put their careers on hold to care for children or aging parents. Add the gender wage gap to the equation and it’s easy to see how women are lagging behind in terms of growing their wealth.

One of the biggest challenges for women is that we’re not talking about money nearly enough. My experience has shown me that this often comes down to a lack of financial confidence. We need to initiate more conversations around topics like advancing our careers and collaborating to build wealth in our lives. It’s a key part of how women can change the narrative going forward. Women have so many more opportunities than they did 25 years ago, but we’re not having these conversations enough as a community.

Whether you’re a working mother juggling your family, career and household, or a woman who just wants to learn more about investing, Opal Wealth Advisors is here to help guide you every step of the way. I’ve dedicated my life’s work to empowering women to lead more financially confident lives. The future starts with us, and I’m excited to see where it leads. Contact us today to get started.