Research consistently shows that women beat men at investing in the stock market, and the explanation is less flattering to male investors than most assume. The gap comes down to one habit: how often you trade.
What the data actually shows
A BBC News report, drawing on Barclays data, found that women trade roughly half as frequently as men. The return difference that follows is consistent across multiple studies.
Over a three-year period, women achieved a cumulative return of 50% (equivalent to 14.5% annualised) against men’s 47% (13.7% annualised), according to the data cited by the BBC. The gap is not enormous, but it is persistent.
Wider evidence compiled by The Motley Fool reinforces the finding. A Warwick Business School analysis of 2,800 UK investors found women outperformed men by 1.8 percentage points. A separate Fidelity study of 5 million customers over ten years found women ahead by 0.4%. A University of California, Berkeley study from the 1990s put the gap at close to 1%.
The direction is consistent. The margin varies. The cause is broadly the same in each case: men trade more often, and trading more often costs more and produces worse outcomes.
Why women beat men at investing: the trading-frequency effect
Frequent buying and selling generates transaction costs and locks in timing mistakes. Every unnecessary trade is a drag on the portfolio. The data suggests men take on that drag at roughly twice the rate women do.
There is also a risk-appetite dimension. According to Fidelity’s 2024 data, 51% of women describe their investing approach as conservative, compared with 47% of men. Only 3% of women call themselves aggressive investors, against 6% of men. A less aggressive posture tends to mean fewer reactive trades after market moves, which is precisely where retail investors most reliably lose money.
One caveat worth noting: only 26% of British women invest, against 41% of men. A smaller pool of women investors may be more financially engaged as a group, which could flatter the aggregate performance figures. The studies cited above try to control for this, but the selection effect is worth keeping in mind.
A second caveat is the time horizon. The BBC article calls a three-year period ‘long-term investing.’ By most definitions, it is not. An investor saving over a working life is looking at 30 years, not three. The three-year window tells us something useful about the cost of overtrading. It tells us rather less about the full shape of long-term wealth accumulation.
Rolls-Royce as a case study in patience
Rolls-Royce (LSE: RR.) illustrates the cost of short-termism as well as any stock in the FTSE 100 over the past five years. The shares rose more than 1,500% across roughly that period. Investors who sold after the initial post-pandemic doubling locked in a fraction of those gains.
The underlying business has continued to develop. Rolls-Royce’s 2024 full-year results, published via Investegate, set upgraded mid-term targets of £3.6bn to £3.9bn in underlying operating profit, a 15% to 17% operating margin, and £4.2bn to £4.5bn in free cash flow, all on a 2028 timeframe.
The Power Systems division added further momentum. According to Investing.com UK, Power Systems profit surged 72% to £528 million in 2024, driven by data-centre demand. The company raised its power generation growth target to 25% annually through 2030.
The civil aerospace business retains structural advantages. Manufacturing large aeroplane engines operates in a market with high barriers to entry: the certification requirements, the long-term service contracts, and the capital intensity combine to limit competition. That does not eliminate risk, pandemic-related grounding of fleets being the obvious historical example, but it does support the case for a long holding period.
The Rolls-Royce 2025 Annual Report records the deconsolidation of Rolls-Royce SMR Limited in March 2025, generating a gain of £52 million, as the small modular reactor programme moves into a new phase of development outside the group’s consolidated accounts.
The lesson from the gender investing data and from a stock like Rolls-Royce points in the same direction: the investors who do best are usually the ones who do least. The 2028 targets give a concrete near-term test of whether Rolls-Royce can deliver on that patience.
