Why Investing Like a Woman Could Be Crucial for Your Portfolio

While men have long dominated Wall Street, the numbers tell a different story about who makes better investment decisions. Women investors consistently outperform their male counterparts—and it's not even close.

For women, “the lower turnover, long-term consistency, and behavioral steadiness tend to result in fewer costly mistakes and greater compounding, which typically lead to stronger returns,” Hilary Hendershott, a certified financial planner and founder of Hendershott Wealth Management, told Investopedia.

Key Takeaways

Women investors tend to outperform male investors.
Many women take a longer-term approach, developing an investment plan and sticking with it, rather than reacting to market swings.
These steps help keep costs lower, minimize the risk of mistakes, and enhance the impact of compounding returns.

Slow and Steady Wins the Race

Study after study confirms that women tend to get better results when investing. A landmark 2001 study by researchers at the University of California, Davis, examined more than 35,000 households and found that excessive trading by men reduced their returns by 2.65 percentage points, compared to 1.72 percentage points for women.

In 2018, researchers at Warwick Business School in England found that investing returns for women outperformed those for men by 1.8 percentage points on average. Most recently, Wells Fargo's 2025 analysis of over 50,000 accounts from 2018 to 2024 showed that single women achieved higher risk-adjusted investment returns than single men while taking on less risk. And female-led joint accounts topped all categories.

The reasons for this pattern are linked to psychology, socialization, and behavior, Hendershott said. She also noted that women are less likely to be raised to see themselves as investors, so they tend to approach investing with some humility. Once they start investing, they’re more likely to choose a growth or target-date fund and then leave it alone.

Stephanie McCullough, founder of Sofia Financial, said women are often labeled as risk-averse, though she prefers to say they’re more “risk aware.” “They really want to understand the risks they’re taking,” McCullough said, adding that women tend to do a bit more research before investing.

Once women understand what they’re buying, they “kind of fix it and forget it,” McCullough said. Many are willing to stick with their investment plan rather than act on tips or gut feelings, she said.

In addition, men often gain a “social reward for fixing things, solving problems, and being aggressive," Hendershott said. That can translate into action-oriented investing, such as trading frequently and trying to beat the market.

The Investment Gap Persists

The wealth disparities by gender remain stark. According to a 2023 Bank of America report, the average 401(k) balance for men was 50% higher than for women. Meanwhile, a 2025 U.S. Department of Labor report found that the median value of a woman’s 401(k) or individual retirement account is about 40% less than a man’s median account value.

The reasons are both cultural and financial, Hendershott said. “Women tend to earn less, have less disposable income to save, and start investing later,” she said. That’s partly due to the gender pay gap and partly due to long-standing beliefs about money and women’s confidence in their ability to invest.

Media also plays a role, McCullough said, often highlighting ways for women to cut expenses, while stories geared toward men tend to focus on how to beat the market.

Best Practices

When it comes to investing, men and women can learn from each other. From women, men can learn the power of patience and humility, Hendershott said. “You don’t need to outsmart the market,” she said. Studies consistently show that women’s buy-and-hold approach and lower trading frequency lead to better long-term results.

From men, women can learn the value of starting early, saving consistently, and claiming ownership over their financial futures, Hendershott said. “You don’t need permission to build wealth,” she said. “You don’t have to master every financial term or predict every market turn.”

The Bottom Line

The stock market is the greatest generator of individual wealth in human history, Hendershott said. The most effective investors, regardless of gender, do several things well, she added: They stay invested long-term, they avoid unnecessary trading and keep costs low, and they align their strategy with their actual goals, rather than with news headlines. As the data shows, women’s investing behaviors—lower trading frequency, disciplined risk-taking, and willingness to seek professional guidance—lead to superior returns.