Women are Timid Investors Because They Don’t Gamble on Sports

We Had Piggy Banks, They Had Poker Nights

Key Takeaways

• Women aren’t worse investors than men—we just get less exposure to risk-taking.

• Risk tolerance questionnaires reinforce the gender investment gap. These flawed assessments often push women into overly conservative portfolios, limiting long-term growth and costing them millions.

• The solution isn’t gambling—it’s smart, steady exposure to investing. Learning market history, reading the right books, and making small investments can help women build confidence and long-term wealth.

The year is 1997. I am nine years old, and I am on a playdate at my friend Shoshana’s house. It’s a lazy summer day in Los Angeles. We are not outside enjoying the warm air or her gorgeous swimming pool. We are inside, sitting on the floor of her bedroom with our most prized possessions laid out before us: Sanrio pencil cases filled with Hello Kitty, Keroppi, and Bad Badtz-Maru pencils, erasers, and Post-its—office supplies that nine-year-olds don’t really need but are completely obsessed with.

We buy these treasures from the Sanrio store at the Fashion Square Mall. Since we obviously don’t have jobs, we survive on allowances—a few dollars a week, hoarded in Tootsie Roll-shaped piggy banks, waiting to be spent on our next mall trip.

Across the hall, her older brother is with his friends, watching some sport on TV.

“I bet you a dollar they score in the next minute.”

“No way,” says another kid.

The score happens.

“Hey, you owe me a dollar.”

“Man, I don’t have a dollar.”

“Well, you better get one, or I’m gonna kick your ass.”

At nine years old, I am vaguely aware of what’s going on in the other room, but it sounds…dangerous.

Shoshana and I trade pencils and erasers back and forth. We decide we need to pool our resources and save up for a shared pencil case. We are best friends, so obviously, we should share it. No bets, no risks—just a sure thing. We plan to save half of our allowance for the next four weeks, and then we’ll have enough.

Then, in college, it’s similar. The boys place bets on games and fantasy football becomes a thing. Take a little risk, play a game, get some reward. Or, get burned, but still have fun on the way down. Meanwhile, us girls were budgeting. Make some money by helping a professor, spend it wisely. It was cheaper to live off campus at my college so five of us lived in a house together and spent hours and hours meal planning for the week to figure out how we were going to feed ourselves on $20. That’s not to say the boys weren’t spending, but there was lots of gambling. And the girls did not participate. It’s not a stereotype, it was my experience.

Fast forward to adulthood and paychecks and guess who’s more comfortable pouring money into the stock market and who’s clutching her purse, afraid to invest beyond a savings account because it sounds “dangerous.”

Many women (not all, but many) grow up without the same casual exposure to financial risk-taking that guys often get from things like sports betting, poker nights, or fantasy football leagues. By the time adulthood rolls around, women are great savers, yet we’re hesitant to risk it. We lovingly feed our savings accounts and admire them with pleasure, like the Hello Kitty pencil cases of our childhood. But we often shy away from the idea of investing because we don't have experience with risk. We don’t want to lose what we have.

Meanwhile, plenty of our male peers have been “playing” with money in one form or another since they were kids – whether it was betting on the Super Bowl, trading baseball cards, or later dabbling in crypto. The boys are used to seeing their net worth move up and down.

Is it any surprise, then, that studies consistently find women more gun-shy about investing? We’ve essentially been kept on the financial sidelines.

Taking small risks early might just be the secret training camp for confident investing. Women need experience in risk-taking to catch up, no DraftKings app required.

Betting is Risk Taking

The lower engagement of women in sports betting could be reflective of a broader aversion to financial risk-taking. One that was solidified at a very young age and reinforced over and over again. It never occurred to me to invest in the stock market after college, when I was making money. And I’m pretty sure the case was the same for my girlfriends.

Culturally, boys often get nudged into risk-taking early. It’s socially acceptable (even expected) for boys to be bold and a bit reckless – “Boys will be boys,” as the saying goes (usually said while shrugging off some insane thing a boy just did🙄). Girls, on the other hand, are often encouraged to play it safe. We’re praised for being careful, for saving our allowance, for making “smart choices.”

That early divide shows up in gambling statistics. For instance, one study of young adults found that 69% of men had engaged in some form of gambling, versus only 36% of women​¹ Basically, the men were about twice as likely to be rolling dice, buying lottery tickets, or betting on a sports event.

That’s a lot more practice dealing with risk and reward². Men also tend to have higher thrill-seeking and risk-taking tendencies in general​– meaning they enjoy the rush of a risky choice in a way many women might not have learned to. Whether it’s nature or nurture is debatable, but the outcome isn’t: by adulthood, many men are well acquainted with the concept of “high risk, high reward” (and sometimes “high risk, big loss”), whereas many women are more familiar with “better safe than sorry.”

Consider what those early experiences with risk teach: Resilience. If a 14-year-old boy loses his $5 bet on the Yankees, he’s bummed, but he survives. He learns that losing money isn’t the end of the world – it stings for a bit and life goes on (maybe his team even wins the next day, giving him another chance to bet/brag). This “no big deal” attitude around small losses is actually super valuable when it comes to investing later on in life. Contrast that with a girl who’s rarely, if ever, allowed herself to lose money on purpose. When she sees her first investment lose value, it’s not just an educational event – it feels deeply personal and scary. She hasn’t been “trained” to know it’s normal and temporary. She doesn’t know how to shrug it off.

To put it another way: a lot of women learn to save, but we don’t always learn to risk. We had piggy banks, not poker nights. By the time we’re adults, that difference starts to play out in our investment choices.

I pulled a bunch of stats to back up my point that women don’t invest as much as men from various academic studies, but none of them illustrate the gender gap in investing and risk-taking as well as simply looking at the user base of the trading platform Robinhood. In a 2022 report, the company released demographic data that clearly states only 35% of the users on their platform are women. Men are twice as likely to have trading accounts.

The Gender Investment Gap

I’ve lost count of how many times I’ve heard the female half of a couple say in a financial planning meeting, “I’m just not as comfortable with risk as he is.” And every time, I cringe—because if your average financial advisor hears this (I’m obviously not your average financial advisor), what happens next could cost that woman hundreds of thousands, if not millions, over her lifetime.

Here’s how it typically goes down: The advisor asks the husband, “How comfortable with risk are you?” He shrugs and says, “Pretty comfortable. I like to take risks.” Boom—he’s placed in a portfolio that’s heavy on stocks, which are typically riskier than bonds but also come with higher potential rewards. Meanwhile, the wife—having just admitted her discomfort with risk—ends up with a more conservative allocation. And just like that, the investment gap widens.

This is still how much of the financial industry operates: An advisor will give someone a risk questionnaire that has a couple of vague questions about how you’d feel if your investments went up or down, and suddenly, you’re slotted into a certain kind of portfolio for life³.

Men tend to crank risk all the way up. Women, on the other hand, are often more cautious, not wanting to stomach the downside. By the time they make it through a generic risk questionnaire, they might as well have “LESS RISKY” stamped on their forehead like a financial scarlet letter.

These questionnaires were written by men, for men. And I think that not only are they incredibly harmful, but they are also responsible for the gender investment gap.

What if the first time you set foot in a gym, you had to take a "Fitness Comfort Level Test"? During that test, you were asked whether you liked sweating, if you preferred yoga over weightlifting, or how hard you wanted to push yourself. If you answered, "I like to ease into things," congratulations! You’re forever assigned to low-impact stretching classes while the guys get handed dumbbells and told to hit the floor. They get access to a whole side of the gym you don’t know how to use and won’t have the chance to learn. Never mind that you might have wanted to build strength over time—you’ve already been put in the "gentle exercise" category for life.

Here is what a typical “risk tolerance questionnaire” looks like:⁴

These quick assessments are pretty fucking stupid, in my opinion, yet they are widely used. Maybe you took one when signing up for your 401(k)?

This question: “How comfortable are you with potential fluctuations in your portfolio?” is fundamentally about betting odds. In other words, how much are you willing to lose? How much loss can you endure? Women often have no experience with losing and surviving, so they often pick the most conservative choice and get shuttled into a portfolio that, in my opinion, is too conservative, because the advisor didn’t actually take the time to educate her about how she could make more money if she took a slightly riskier path. So she gets put into the more conservative 60% stock and 40% bond portfolio, while her male counterpart of the same age and income, goes into a 90% stock and 10% bond portfolio because he answered the questionnaire differently.

So, if this portfolio remains unchanged over time, women will miss out on the 30% returns that the men are getting.

Here’s the Gender Investment Gap in action. Let’s look at a specific period - 1990 to 2024⁵.

What I’m doing here is combining historical results of an “aggressive” portfolio of 90% stocks, and a “conservative” portfolio of 60% stocks⁶.

In this real-world scenario, the gender investment gap is 1.44%, which seems like a small number, but is absolutely staggering over a long period. With that annual difference in return between the two portfolios, the difference over 34 years is $103,047.

If I juice the numbers up a bit and add contributions of $10k a year (that would be like investing regularly in your 401(k)) - the number makes me want to throw up. The dollar difference over 34 years is $1,229,120. Just because a woman once told an older male financial advisor in a generic questionnaire that she was “not as comfortable with so much risk,” she lost out on the opportunity to make over a million dollars⁷.

The Real Cost of the Gap

It’s a well-documented fact that women, on average, are more financially cautious. We hesitate to invest and we keep more of our assets in cash. The result? Women are under-invested compared to men, meaning we often miss out on the wealth-building power of stocks and other higher-growth investments. Consider these eye-opening stats:

• Participation gap: Only about 48% of women have money in the stock market, compared to 66% of men​. Many women are essentially sitting on the sidelines, leaving a lot of potential gains on the table (or rather, in the market). This mirrors the Robinhood stat from earlier.

• Safety first: When we do invest, women tend to favor safer assets. A study by BlackRock found that women hold 71% of our wealth in cash, versus about 60% for men.​ Keeping extra cash might feel secure – and indeed, having an emergency fund is great – but you can’t build wealth with your money in cash.

• Lower risk portfolios: Fewer than 5% of women say they take a “good deal of risk” in their investments​. So the vast majority of us are playing it very safe with our money, which usually means lower returns over the long haul.

I gave you a bunch of statistics here to make my point, but I’ve seen the gender investment gap play out in real-time with my clients: she saves, he invests.

Why are we so cautious? It’s not that women are incapable of understanding the stock market or inherently bad at investing (in fact, as we’ll see in a moment, when we do invest, we’re pretty fucking good at it). A big part of it comes down to psychology and socialization. Research suggests that women feel the pain of financial losses more intensely than men do – we’re more loss-averse⁸.​ One study found that over half of the gender gap in risk-taking could be explained by women’s higher loss aversion (and a bit by lower optimism)​.

In plain English: women tend to focus on what could go wrong and imagine that if it does, it’ll hurt a lot⁹. Men, on the other hand, are generally more optimistic that things will go their way and a bit more numb to the pain if they don’t. It’s like women mentally stub their toe on every potential loss, whereas men are wearing emotional steel-toed boots.

And it all starts from childhood. A recent study found that even among kids, boys receive more stocks as gifts (like stock gift cards) than girls, even when the kids are too young to show any interest in finance. Talk about a head start! The researchers concluded that people often assume girls just aren’t into finance, so they encourage them less. So while a boy is getting a share of Apple stock for his 10th birthday, the sister might be getting a doll or a Hello Kitty Pencil case. The boy is quietly being told, “Hey, investing is for you,” in a way the girl isn’t.

All these factors combine to create a picture of the typical female investor as overly cautious – or “timid,” as our title puts it. But here’s the thing: timid isn’t the same as stupid. In fact, there are upsides to the way many women approach investing.

Women Are Better Investors—Once We Start

But sometimes, avoiding unnecessary risk works in our favor. The very things that make women hesitant also make us pretty savvy investors once we actually get in the game.

Surprise, surprise: women often outperform men in investing because they don’t mess with their portfolios as much. On average, women’s investment portfolios earn slightly higher returns. This is, of course, when comparing similar portfolios - unlike our example above of the 60/40 vs 90/10 portfolio, which had a 1.44% wealth gap because we compared two wildly different allocations.

A Fidelity study in 2021 found that women investors outgained men by about 0.4% (40 basis points)¹⁰ annually. And some studies have found an even bigger edge, up to nearly 1% per year.​

Why do we outperform if we’re so timid? Precisely because our stereotypically cautious style means we avoid a lot of dumb mistakes. We trade less frequently and panic-sell less often. One famous study called “Boys Will Be Boys” documented that men traded 45% more often than women, which actually dragged down their returns by an extra 0.94% per year (2.65% loss in return for men from trading vs 1.72% for women). In investing, overconfidence can be costly, and men seem to have it in spades – whereas women’s healthy skepticism (“Are you sure about that memecoin, Chad?”) can save us from chasing fads.

So, we just need to overcome a few hurdles, and then we’ll be golden. The first hurdle is getting into the market, and the second is understanding what risk actually means.

The great irony I see over and over again is that women are accused of being emotional when we’re usually just being practical. Men are fragile, overly emotional creatures who are so ill-adept at managing their behavior that more and more of them end up miserable and alone because they drive people away. (It’s been a week, my friends)

It all comes down to comfort with risk. Allow me to make some generalizations here, but nod your head along in agreement, please: Men don’t ask for directions and get lost, adding hours to car trips. Men insist they are skilled enough to clean their own gutters and end up falling off the ladder and end up with debilitating back pain for the next decade. Men constantly trip over themselves, driven by their comfort with risk that’s often gone unchecked for decades. Women are less comfortable with risk so are often adamant about taking the safer path that will likely lead to better outcomes, even if it takes longer.

So if women are doing well when we invest, why worry? Well, the outperformance is great for the women who invest. But remember, far fewer of us are investing to begin with, or we’re not investing enough of our assets and we’re not getting the support from financial advisors to put us in the right funds. Earning slightly higher percentages on a much smaller base can still leave us behind in absolute dollars.

The Solution: How to Become Comfortable with Risk

The solution is not for women to develop a gambling habit, it’s to become comfortable with taking risks.

1. Get comfortable with stock market history and understand that you can’t lose all your money in one day.

2. Read a good book about investing that actually encourages you instead of overwhelming you with information about Sharpe ratios and Alpha. My top recommendations: JL Collins’ The Simple Path to Wealth and Nick Murray’s Simple Wealth, Inevitable Wealth.¹¹

3. Dip your toe in the water, either with fake money, or a very small amount of money. Use a stock market simulator (like this one). Or FFS, just hire a financial advisor you like and trust. Interview three of them and explain your hesitancy around money. BUT ONLY DO THIS AFTER YOU’VE READ THE BOOKS!

History Shows us Short-Term Losses are Not Painful in the Long Run

In gambling, you get higher rewards for taking riskier bets. The underdog horse who lost the past sixteen races will have low odds. Take a risky bet on her, and you’ll be rewarded handsomely. However, you will most likely lose all your money.

But what’s so great about investing in something like the stock market is that it’s VERY hard to lose all your money. In fact, if you invest over a decade or two, or more, it’s very hard to lose any money at all.

So ladies, and you, too, gentlemen, I want you to study stock market history with me for a bit to make sure you’re a little more comfortable with this idea of risk. Because I don’t think it means what you think it means.

Understand the History of the Market: 5, 10, and 20-year Returns

TL;DR: YOU CAN’T LOSE. If you invest over a period of 20 years, it’s impossible to find a period from 1950 to 2024 where a diversified 60/40 portfolio would have lost money if you stayed invested.

Over time, big scary events are just blips. Here’s a chart of the growth of $1 invested in the S&P 500, with current events marked along the way¹².

Do you remember how fucking scary it was in March 2020? The stock market took one of its biggest dips EVER on March 16th, 2020. That was also the day I sent my four employees home from our office in the WeWork in Williamsburg, Brooklyn. The air was thick with panic, doom and uncertainty. The 18-wheeler refrigerated truck preserving the bodies of the elderly who were some of the first to die from COVID-19 in New York City was parked a few blocks from my apartment. It was an incredibly dark time. I didn’t panic sell my portfolio. I convinced almost all of my clients (in back-to-back exhausting meetings that started at 8 am and often went till 8pm) to stay in the market and to ride it out. Anyways, we made it through and enjoyed five years of growth even though we’ve also seen Russia invade Ukraine, two elections, Silicon Valley Bank fail, and more crazy headlines. Resilience, that’s what it takes.

Really bad things happen. Or, maybe your team loses the Super Bowl, and you lose $1,000. Get used to it.

In the end, women don’t need to start betting to build wealth—but we do need to stop treating investing like a life-or-death decision. The stock market isn’t a casino, and risk isn’t the enemy. It’s time to channel less Hello Kitty pencil case energy and more I’m willing to lose $5 on the Yankees energy. Because sitting on the sidelines? That’s the biggest gamble of all.

Parting shot: Playing it too safe is the riskiest bet of all.

Best $20 I spent this week: $12 martini during happy hour with my friend Josie at El Pingüino, one of Greenpoint’s best bars.

1. Here’s another study showing how way more men gamble than women.

2. I know gambling is a real addiction and I’m not advocating for it. Get help if you need it.

3. Okay, so maybe it’s not FOR LIFE. But these allocations can last decades.

4. This one is from Edward Jones.

5. I just randomly picked it, don’t come for me.

6. This portfolio visualizer tool is pretty neat.

7. Check your own portfolio to find out the breakdown between stocks and bonds.

8. This is a fun study.

9. Not to get too far off-topic, but think about dating. So many women I know (and myself included back in the day focused on avoiding suffering. When we’re getting ready to go out and potentially hook up with someone, a big focus is risk aversion. How can I have a good time, meet someone I’m attracted too, but also not get sexually assaulted? Meanwhile, guys are like, hell yeah, this shirt seems relatively clean, let’s fucking go!

10. I want you to learn this lingo: BASIS POINT. It’s what we finance people who use to talk about small percentages. Instead of saying one percent, we might say one hundred basis points.

11. You have to order directly from him, it’s weird, but trust me, this book is life-changing.

12. Source: Chase.