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Investor poll: Optimism varies by gender

Though investor optimism is at an 18-year high, women are more concerned than men about several factors affecting retirement, according to the latest Wells Fargo/Gallup Investor and Retirement Optimism Index.

March 27, 2018

Investors are still upbeat about the economy: Optimism is at an 18-year high and confidence in the market is at a six-year high, according to the first quarter 2018 Wells Fargo/Gallup Investor and Retirement Optimism Index1, which was released March 27.

The level of confidence, however, varies by gender. The latest survey of investors finds that women are less optimistic when it comes to stock market performance, the economy, tax-law benefits, and other factors affecting retirement savings.

Among the gender differences observed:

  • Fifty-six percent of women think now is a good time to invest in the stock market, versus 64 percent of men.
  • Fifty-nine percent of women are optimistic about the economy, versus 73 percent of men.
  • Sixty-six percent of women think they will achieve their five-year investment goals, versus 76 percent of men.
  • Twenty-nine percent of women not yet retired think they will have enough money to retire, versus 38 percent of men. However, among women with a written plan this number increases to 37 percent, and increases to 45 percent for men with a written plan.
  • Twenty-six percent of women think the tax law changes would be mostly good for them personally, versus 43 percent of men.

The results support previous research about gender gaps in retirement savings. A recent Wells Fargo Investment Institute report, for example, found that women, who generally lack confidence about investing, actually make great investors and outperform men on average because they take less risk and possess qualities such as patience, persistence, and discipline.

Mel Hooker
Mel Hooker

“This new research aligns with our findings that women are more likely than men to receive advice from a dedicated financial advisor (58 percent versus 45 percent) than men, and more likely to have a written financial plan that guides their decision-making than men (54 percent versus 47 percent),” said Mel Hooker, head of Relationship Management for Wells Fargo Institutional Retirement and Trust

The quarterly index, registering at +139 in first quarter 2018, remained at an 18-year high and is nearly identical to the third and fourth quarters of 2017. The last time there was a higher overall index score was in September 2000, when it reached +147.

first quarter 2018 Wells Fargo/Gallup Investor and Retirement Optimism Index

The survey was conducted after a major sell-off on Wall Street sparked the Dow Jones Industrial Average to plunge below 24,000, promptly followed by a recovery. Yet, 52 percent of investors either felt “not too concerned” or “not at all concerned” about that recent market volatility.

Hooker said the gender differences in investor optimism may be related to life expectancy.

“Because of their longer lifespans on average, having enough money at retirement can be a bigger challenge for women,” Hooker said. “Facing the question of ‘whether the money will last’ head-on and planning for retirement helps move the unknown element that can sometimes erode confidence.” 

All the more reason, Hooker said, to realize the importance of estimating monthly retirement expenses, creating a retirement income plan, and developing a retirement savings strategy now to prepare.

Taxes, she added, “may be perceived as a wild card for retirement savers, given the unknown nature of what the future political climate holds, but nevertheless it’s a good idea to run a few different scenarios in the planning process. A well thought-out tax diversification strategy may also help address some of the uncertainty where federal income tax rates in retirement are concerned.”

Leslie Ingberg contributed to this report.

1The Wells Fargo/Gallup Investor and Retirement Optimism Index was conducted Feb. 2-25, 2018, by telephone of 1,321 investors, aged 18 and older, randomly selected from across the U.S. with a margin of sampling error of +/- 3 percentage points. The study defines an investor as an adult in a household with total savings and investments of $10,000 or more. About two in five U.S. households have at least $10,000 in savings and investments.  The sample size consists of 71 percent nonretirees and 29 percent retirees. Of total respondents, 36 percent reported annual incomes of less than $90,000; 64 percent reported $90,000 or more.

The Wells Fargo/Gallup Investor and Retirement Index is an enhanced version of Gallup’s Index of Investor Optimism, which provides the historical trend data. The median age of the nonretired investor is 47 and the retiree is 69.

The Index of Investor Optimism had a baseline score of 124 when it was established in October 1996. It peaked at +178 in January 2000, at the height of the dot-com boom, and hit a low of -64 in February 2009.

Wells Fargo and its affiliates are not tax or legal advisors.

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 Institutional Retirement & Trust is a business unit of Wells Fargo Bank, N.A, a bank affiliate of Wells Fargo & Company.