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More likely to say they are afraid to take investment risks.
Whether they know it or not, women possess behavioral traits that tend to follow recommended investment principles.
By refraining from excessive trading, seeking educational support, and sticking to their investment plans, women may have better long-term investment results.
2x as many women than men were likely to seek education from a financial advisor in order to make more informed investment decisions.6
Note: Barber and Odean studied differences in equity portfolios while the WIM Analytics study compared full portfolio returns.
“Gender Differences in Performance at Wells Fargo Advisors,” WIM Analytics, December 2016.
Variability—a measure of how disperse (spread out) returns are relative to a benchmark.
A low variance indicates that returns are more similar across the data set.
By setting clear investment goals and actively preparing for retirement, women will be able to see continued success in their investments.
|Assets to Consider|
|Down payment on a house||6–12 months||Low||Cash alternatives (bank certificates of deposit, bankers'
acceptances, money market accounts, money market
funds, savings accounts, Treasury bills)
|Education expenses||5 years||Modest||Bonds, stocks, public real estate (REITs)|
|Growth for retirement||15 years||Higher||Bonds, stocks, REITs, commodities, alternative
|Bequest to charity||30 years||Very high||Stocks, REITs, alternative investments, and certain
types of higher-risk bonds
Asset allocation is an investment method used to help manage risk. It does not ensure a profit or protect against a loss. All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable.
Each asset class has its own risk and return characteristics. Alternative investments trade in diverse complex strategies that are affected in different ways and at different times by changing market conditions. Strategies may, at times, be out of market favor for considerable periods with adverse consequences for the investor. Bonds are subject to market, interest-rate, credit/default, liquidity, inflation, and other risks. Prices tend to be inversely affected by changes in interest rates. Credit risk is the risk that an issuer will default on payments of interest and/or principal. This risk is heightened in lower-rated bonds. If sold prior to maturity, fixed-income securities are subject to market risk. Real assets are subject to the risks associated with real estate, commodities, and other investments and may not be suitable for all investors. Stocks are subject to market risk, which means their value may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. Real assets are subject to the risks associated with real estate, commodities, and other investments and may not be suitable for all investors. Real estate has special risks, including the possible illiquidity of underlying properties, credit risk, interest-rate fluctuations, and the impact of varied economic conditions. The commodities markets are considered speculative, carry substantial risks, and have experienced periods of extreme volatility. Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity.
Source: Investors and Retirement Optimism Index, 2016, Wells Fargo/Gallup. The Index includes 1,021 investors randomly selected from across the country with total savings and investments of $10,000 or more.
Wells Fargo Investment Institute is home to more than 100 investment professionals focused on investment strategy, asset allocation, portfolio management, manager reviews, and alternative investments. Its mission is to deliver timely, actionable advice that can help investors achieve their financial goals.
The Wells Fargo/Gallup Investor and Retirement Optimism Index was conducted August 5–14, 2016, by telephone. The index includes 1,021 investors randomly selected from across the country with a margin of sampling error of +/- four percentage points. For this study, the American investor is defined as an adult in a household with total savings and investments of $10,000 or more. About two in five American households have at least $10,000 in savings and investments. The sample size is composed of 71 percent nonretirees and 29 percent retirees. Of total respondents, 43 percent reported annual income of less than $90,000; 57 percent reported $90,000 or more.
Wells Fargo Investment Institute thanks Justin Krieger, CFA, and John Morton, M.S., Ph.D., of Wells Fargo Wealth and Investment Management Analytics Group for the use of their research on “Gender Differences in Performance at Wells Fargo Advisors.” Wells Fargo Wealth and Investment Management, a division within the Wells Fargo & Company enterprise, provides financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Brokerage products and services offered through Wells Fargo Clearing Services, LLC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. Bank products are offered through Wells Fargo Bank, N.A.
The information in this report was prepared by the Global Investment Strategy (GIS) division of WFII. Opinions represent GIS' opinion as of the date of this report, are for general informational purposes only, and are not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation; an offer to participate in any investment; or a recommendation to buy, hold, or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time horizon.
Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
Wells Fargo Wealth Management provides products and services through Wells Fargo Bank, N.A., and its various affiliates and subsidiaries.
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