Best Personal Investment Strategy – Investing for Women

By in Investing, Mutual Funds, Retirement, Saving | 28 comments

Invest Like a Woman and Become a Millionaire by Investing

Investing Tips for Women

With my experience as a multi-decade investor, former professional portfolio manager and university investments instructor, I will answer the question, “Where should I invest money to get good returns.

You’ll learn easy to implement strategies to build wealth for women (and men too).

Research by Prudential found that women worry more about risk than men. I get it, despite investing for decades, I’m scared of risk too.

Women report that they lack confidence in finances too. Even though in multiple studies, women are more successful investors than men.

Women, investing is so simple, once you learn the basics, you’ll wonder why you haven’t started earlier, or invested more.

So, put aside your fear, learn a few investing basics, and get started building your financial future.

Women, it’s easy to find the best investments to make money – for the long term. 

Traditional wisdom recommends looking at your total investable assets like a pie. Put the largest piece of pie – up to 80% in stock investments, depending upon your age an risk tolerance, and watch your portfolio grow.


Investing 101 for Women 

Investment Strategies for Beginners

Long term, investing in stock and bond funds is a brilliant way to build wealth.

But first, know your investment history.

Broad stock market indexes have returned more than 9% annually over long periods of time. In fact, from 1928 to 2018, the average stock market return was 9.49%. Yet, don’t let this long turn return fool you. Embedded in the glorious long-term stock market returns are some horrible losing years.

Long Term Investment Returns


Stock Market

(S&P 500 w dividends)


3-month Treasury Bill


10-Year Treasury Bond













Data source;

From 2002 to 2011, the stock market returned 2.88%, in contrast with the historical long-term average of 9.49%. And if you were savvy enough to begin investing in 1969. Those dollars would have grown an annualized 9.73% through 2018.

In reality, most investors do not achieve an average annualized return over time on their long term stock investments.

women investing

The typical investor, due to fear, greed, or a belief that she can outperform the market will buy and sell various individual stocks and managed mutual funds. When stocks are on a normal cyclical downturn, investors get scared, and sell. Conversely, during cyclical stock return upswings, investors, afraid of missing the boat buy as the markets hit a peak. This type of behavior leads to buying high and selling low.

According to Barber, UC Davis and Odean, UC Berkley in the “Behavior of Individual Investors”, individual investors:

  1. Underperform standard benchmarks (e.g., a low cost index fund).
  2. Sell winning investments while holding losing investments (the “disposition effect”).
  3.  Are heavily influenced by limited attention and past return performance in their purchase decisions.
  4. Engage in naïve reinforcement learning by repeating past behaviors that coincided with pleasure while avoiding past behaviors that generated pain.
  5. Tend to hold undiversified stock portfolios.

These behaviors damage your long term net worth.

So, although over long periods of time investments averaged over 9% annually, most investors do not achieve those same returns.

But, these self defeating investing tactics can be turned around into the best investing strategies for the long term.

Investing Tips for Women – How to Combat Investment Underperformance

The research is abundantly clear that it is extremely difficult to beat the returns of the overall market. Even exceptional mutual fund managers who outperform the major stock market indexes before expenses, fail to surpass their benchmark indexes when expenses are factored in.

Sure there are exceptions, Warren Buffett, Peter Lynch, and George Soros are extraordinary investors. Chances are, you’re not one of them. Plus, there are excellent women investors as well!

In reality, the majority of highly compensated managed mutual fund managers fail to outperform their market benchmarks.

So, if most investors fail to outperform the simple stock market indexes, what should women investors do?

Here’s, what you should invest in?

The Best Personal Investment Strategy for Women (and Men too)

Women, here’s how to win at investing with long term investment strategies:

1. Invest for the long term. If you cannot leave your money in a stock index fund, for at least 8-10 years, do not invest. Markets are volatile and over the short term, your returns are random. Over the long term if you believe U.S. and global companies will grow and prosper, then their underlying stocks will advance as well.

2. Cut investment expenses to the bone. Realize that investment expenses are taken off the top. If you invest in a managed mutual fund charging 1% per year, then out of every $1,000 you invest, only $990 is going towards building wealth. And that’s not just in year one, that’s every year, that 1% is taken out. Thus, if the fund loses 3% one year, you lose 4%.

Go with the lowest expense mutual fund or Exchange Traded Fund (ETF) you can find. For example, VTI, Vanguard Total Market Index ETF charges, 0.05% per year while the category average is 0.33%. Less money toward annual management fees means more money in your pocket.

3. Don’t fight the market. Accept the fact that it is highly unlikely that you will beat the market, so choose highly diversified low fee investment funds for your portfolio.

4. Choose your asset allocation carefully. Divide your investment pie among stock index mutual funds or ETFs, and fixed income investments like bonds and cash. Plan your investment pie according to how much risk or volatility you can stomach. If you don’t like the ups and downs in value of stock investments then place a smaller percent in those types of investments. Be aware that the opportunity for greater returns comes from taking on more risk. And more risk means a larger part of your pie invested in stock investments.
If you want free investment management help in designing and managing your investment pie, check out one of my favorite platforms, M1 Finance.

5. Stick with your plan through market downturns. No one has a problem when their investment values surge. The problem comes when fear kicks in and you get scared during market downturns. I know more than a few folks who let fear get the best of them and sold during market downturns only to miss the subsequent rebound.

If you sell during a market downturn, you have to be right twice, once when you sell and another time when you buy back in.

Women, Become a Millionaire in 25 Years of Investing

Women, start at age 40 and become a millionaire by age 65.

Even if you have not begun investing and have nothing saved at age 40, it is possible to reach $1,000,000 by age 65. You invest $1,236 per month in a portfolio equally divided between a U.S. stock index fund, an international stock index fund, and a Treasury Inflation Protected Securities (TIPS) fund. You can choose a mutual fund or an ETF

Review; Quicken vs. Personal Capital – Which is the Best Money Management Tool?

Assume historical returns prevail. If you earn 6.9% annually, then at the end of 25 years, your $370,800 investment will be worth $1,000,000.

Of course, if you start investing younger, you can achieve $1,000,000 with less money.

Start at age 25 and you only need to invest $385 per month to achieve $1,000,000 by retirement. And if your employer kicks into your 401k retirement account, you can invest less and still reach $1,000,000 or more by retirement.

Realize that fear is normal. But, don’t let your apprehension stop you from wealth building.

Start investing today to take care of your financial tomorrow.

Women Investing Resources

Here’s some help to get you started with your investing:

  1. Investment manager with low fees (not) for women only; Ellevest.
  2. Free microbook; How to Invest and Grow Your Wealth
  3. Free budgeting, cash management, retirement planning, investing dashboard (I use this myself). Sign up required. Sponsored by Personal Capital.

What is your personal investment strategy? How is it working out?

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.

Updated; April 26, 2019




  1. So great to see someone remind us that even at 40 it’s not too late to be successful! There is one caveat, though: be mindful of the economic cycle. Because it moves so slowly, it’s easy to miss one of the biggest impacts on the results of your investing.

    William @ Drop Dead Money

    October 25, 2012

  2. The last 10 years has been unusual, but over a 40 years period somewhat expected. I have always looked at investing long term. It is good to know my investments will grow over the next 30 years.


    October 25, 2012

  3. Great post. My strategy is much like the one you outlined. Keeping those emotions separate is a major key. I purposely hold back about 20% cash so I can take advantage of major lows so I can come in and get a stock at a discount.

    John S @ Frugal Rules

    October 26, 2012

  4. I started investing in mutual funds last year and so far, so good. I selected ones that had a strong historic performance, two that were more “risky” but offer a slightly higher return (and that’s been working out) and one that’s much safer but offers a lower return (that one’s a bit of a stinker right now.) I’ve also been good about not touching them. I’ve let them be remembering that it’s the long term I’m trying to achieve. Now I just need to boost the rest of my retirement plan and increase my investment amount.

    Little House

    October 26, 2012

  5. I love inspirational posts like this (at least I find them inspirational). Your 5 points are all things I consider when making my investments (though I do also dabble in individual stocks), and I feel very confident in the strategy. And thinking about my money compounding and calculating how long it will be until I’m a millionaire is just so much fun. 🙂

    Gen Y Finance Journey

    October 26, 2012

  6. You rock, Barbara! Excellent stuff. It should be 101, but you and I both know that the average person does exactly the opposite (as you noted in the piece).

    I not only stick to my guns during a downturn now, but I find every chance I can to get even more aggressive. Sometimes that doesn’t work out well in the short run, but I’m using long term funds and keep a long view.


    October 26, 2012

  7. Thank you for writing this, Barbara. Apart from being helpful and making loads of sense, I do find it woderful that you are an exception to ‘start investing at 12 to compound otherwise you are lost’ chorus. Yes, people can start later and finish in a very good place – it is called ‘the rule of equifinality’.


    October 26, 2012

  8. @William, I wanted to put a plug in for those getting a later start. It’s never too late!
    @Krantc- I expect your investments will continue to grow. But…. no one has a crystal ball 🙂
    @John, Good idea and thanks for mentioning the possibility of holding out some cash to take advantage of market downturns.
    @Little House, Congrats on getting started investing. This last year has been great for stock returns. Just a quick reminder that there will be negative return years as well. Don’t freak out if there’s a down year every so often.
    @Gen Y-It’s very gratifying to hear that this post was inspiring. I’m so committed to promoting financial and life long wealth building and am pleased to hear you appreciated the article.


    October 26, 2012

  9. @Joe, Although I’m not thrilled when the downturns come to see my new worth go south, I too like the opportunity to invest a bit more during those market declines.
    @Marie, I must correct you and clarify, I did not start investing at 12 but in my 20’s 🙂 I’ll have to check out the rule of equifinality. Sounds compelling.


    October 26, 2012

  10. Great post as usual Barb. Investing isn’t brain surgery. The tough part is having the discipline to put a strategy in place, monitor and adjust that strategy when appropriate, and stick with your plan through thick and thin in the markets.

    Roger Wohlner

    October 26, 2012

  11. My strategy was been to invest monthly in as diversified a portfolio as I can — but then I took a year’s break (at least for my 401k investing) to get the house paid off. I plan to start back up again next month.


    October 27, 2012

  12. @Roger, Discipline in investing (and life) is so difficult to muster, but pays off big!!
    @Jackie, Wow, I’m impressed getting the house paid off. That’s a great accomplishment.


    October 27, 2012

  13. I, too, appreciate the reminder that 40 isn’t necessarily too late to start investing. It is also a good reminder not to be too greedy; the stock market can be almost impossible to navigate. We are only investing in the 401k/403b right now, but will add an ETF after we pay off some of the school loans.

    Wayne @ Young Family Finance

    October 28, 2012

  14. Great article, I’d also include dollar cost averaging for monthly regular investing.

    Brent Pittman

    November 5, 2012

  15. If your employer offers a match on your 401k you should put in as much as possible. I know everyone’s situation is different but even if you can only put in 1% of your salary and your employer matches it then you have a 100% return on your money!

    David Landen

    November 20, 2012

  16. @David-Thank you thank you. Wonderful advice. We have always scrimped in order to fully fund our workplace retirement accounts. But, as you said, even 1 % contribution (with or without) employer match is 1% more than zero and will compound into the future!!!


    November 21, 2012

  17. The compounding effect can be quite incredible especially after several years. I think the trick is to get people to start contributing. Once they start (and learn to live without their 401k contribution) they are likely to continue.

    David Landen

    November 24, 2012

  18. Hi David, That is my goal, to get people to start saving and investing and realize the beauty of letting your money work for you!!! Thanks for chiming in DAvid.

    Barbara Friedberg

    November 25, 2012

  19. A second place to stash some of your excess cash this year is in peer-to-peer lending platforms like Lending Club and Prosper. With these companies, you’re able to loan money to individuals in small increments as if you were the bank.

    Sarah Taylor

    July 6, 2018

    • Hi Sarah,
      Do you invest with Lending Club or Prosper? I’ve invested with both platforms and still have accounts at each. Although, I’m disappointed in my recent returns, approximately 5%. They are significantly below the returns that the portals showed I’d receive. Although, I elect to have them invest for me, and don’t choose my own investments. What is your experience?

      Barbara Friedberg

      July 6, 2018

  20. I like this blog and this blog is very informative also.


    July 12, 2018

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    July 13, 2018

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    Akash kumar

    August 3, 2018

  23. Very nice post thanks for sharing keep it up we supported you.

    Anup upadhyay

    October 23, 2018

  24. I think you are really an expert in writing unique blogs. I am crazy about your thoughts.

    Geek Squad Webroot

    August 26, 2019


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