Taking Control of Your Finances

Published: March 23, 2022

March is Women’s History Month, a time to celebrate the myriad of social, economic, cultural, and political achievements of women. At Klingenstein Fields Advisors (KF Advisors), we firmly believe knowing more about finances allows women to fully achieve their potential, particularly since women are earning more and increasingly taking responsibility for managing their financial lives. According to a report from Merrill Lynch, Seeing the Unseen, The Role Gender Plays in Wealth Management, 75% of women under age 45 manage their own finances, compared to only 50% of women over the age of 55. In addition, U.S. Census Bureau data shows that women live longer than men, making it likely that at some point they will be in sole charge of their financial lives.

Women are less confident but better investors
Long-term planning and investing seems daunting to many women. According to Fidelity Investment’s 2021 Women and Investing Study, only 29% of women surveyed “feel confident investing for short or medium-term goals,” even though studies have shown women tend to be better investors than men. According to the Fidelity study, which analyzed data from over five million Fidelity customers over a ten-year period ending December 2020, women outperformed men on average by 0.40%. Over time, this amounts to a significant difference.

Why are women better investors?
Women tend to take the long-term view when they invest, and focus more on the bigger picture, while men tend to be more short-term and performance-focused, which can lead to riskier investment behavior:

  • Women generally trade less and invest more consistently, avoiding higher trading costs, as well as potentially mistiming the market
  • Women are more likely to invest in securities and businesses that they understand, relying on fundamentals
  • Women are generally less emotional when it comes to investing, making them less likely to fall in love with an investment and more willing to sell if the rationale for holding is no longer valid

Take control
A few steps can help women become more financially confident and independent, so that they are better prepared for life’s unexpected events. For more information, read our Six Tips for Owning your Wealth. KF Advisors is here to help provide guidance and help you become more knowledgeable about personal finance, planning, and investing, an important first step in taking control of your financial life. Some additional helpful hints:
Keep track of your assets and liabilities, obtaining copies of recent financial documents and statements to get the latest snapshot of your finances

Make a budget that projects recurring and one-time expenditures, so that you have an understanding of your spending versus your assets and income

Build financial independence, such as a separate bank account or credit card to help ensure you have your own credit history and ability to access funds

Assemble your team and your plan, which should include your financial advisor, specialized legal and accounting resources, healthcare, and other resources to help provide expertise and advice. According to the Fidelity study, most women feel more confident about their financial future if they have a financial advisor to help them invest and a solid financial plan in place.

We encourage you to contact us directly by phone at 212.492.7000 or email us at info@klingenstein.com. You’ll find News and Insights on our website and can view our educational webinars on a variety of financial topics on our YouTube channel. And don’t forget to follow us on LinkedIn, Instagram, and Twitter.

Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.