Investing is a skill every woman should possess. At some point in their lives, 90 percent of women will be single, divorced or widowed, according to the U.S. Bureau of Labor Statistics, and therefore entirely responsible for their finances.

Yet some women either don’t invest or delegate the task to someone else, be it a spouse or financial advisor. According to Fidelity, one in four baby boomer and Gen X women actively invest, while only one in five Gen Y women do so. Their top reasons for not being hands-on: They have too much on their plate, don’t know where to get help or have “divided up the labor,” giving the job to their partner.

[See: 10 Tips for Handling Investments and Divorce.]

Women with some retirement savings of their own are the exception, as they are more involved managing their investments. A study by Artemis Strategy Group for Ameriprise Financial surveyed women ages 25 to 70 with at least $25,000 in investing assets and found that 41 percent of these women made financial decisions alone and 56 percent shared the decisions with another person.

The more involved women are financially, the greater their ability to withstand any investing challenges and recognize good opportunities, says Patricia Stallworth, CEO of PS Worth, a financial coaching and education firm in Cummings, Georgia. And there are other payoffs from having women own assets, either jointly or alone.

The returns will be higher. Women investors react less to the market and are more disciplined than their male counterparts, according to a Fidelity study released earlier this year. That study found that women save more — 9 percent of their salaries compared to 8.6 percent for men — and typically have higher rates of return (6.4 percent) than men (6 percent).

Women investors generate better returns because they usually buy and hold, while men trade up to 45 percent more frequently, says Lara Mazek, a financial advisor at Advance Capital Management in Southfield, Michigan. “This may be because men tend to be overconfident in their investing abilities,” she says. “They make changes thinking that they can outperform the market.”

Most of the time, that behavior hurts men’s returns. Women, on the other hand, stick to their long-term goals instead of trying to beat the market, Mazek says.

Investing can help level the playing field. Improving their portfolio balance isn’t the only reason women should participate in investing decisions. Remember, “you have to live with the consequences of those decisions,” says Stallworth, who has written several financial books directed at women, including “How to Get Divorced Without Losing Your Blouse” and the upcoming “How to Become a Wise, Wealthy Woman.”

By not participating, women risk feeding a vicious cycle of being less comfortable with investing and consequently more reluctant to speak up and take part in financial decisions. Women need to believe in themselves, says Robin Lee Allen, managing partner at Esperance, a private equity fund manager in New York. “Women know money, but they often lack confidence in their abilities,” he says. If you don’t feel up to talking to a financial advisor, take an investing education class online or read books about investing. Become more comfortable with how the markets work.

That knowledge is essential because investing can help level the financial playing field for women.”What many women fail to consider is that in general they earn less than men, so investing is a way to play catch up,” Stallworth says. “And, since we tend to live longer than men, that extra [money] will really come in handy.”

Owning assets is empowering. Women also are more likely to become family caregivers, a role with financial costs, not only in lost income but also in lack of empowerment. “In general women still tend to give up their work for their families, either they give it up altogether or take a lesser job, and their husbands become bigger breadwinners,” says Cathy Gearig, a partner at LifePlan Financial Advisory Group in Rochester Hills, Michigan. “It’s not uncommon to sit down with a couple and hear that the woman doesn’t feel like she has a voice even though they made [this] decision as a family.”

[See: 10 Tips for Couples and Young Families to Build Wealth.]

Many times it’s just the husband’s name on the account, and the perception is it’s “his money.” Gearig says. Her suggestion: Put all investing accounts in both spouses’ names. “When you own something, you have a stake in it.”

Financial equity within a marriage often leads to greater mutual respect. “Having unequal distributions of savings in your household can cause stress on your marriage, especially if only one spouse is earning an income,” Mazek says. “Having assets in your name, no matter who you are, makes you feel safer, more capable and more empowered.”

In addition to having a stake in joint assets, women should also practice investing with accounts they exclusively own. To that end, consider setting up a spousal IRA. Although you usually need earned income to contribute to an individual retirement account, married couples who file a joint tax return can create a separate traditional or Roth IRA for a low- or no-wage spouse.

There are no unpleasant surprises. Having some assets of your own becomes important in the case of a spouse’s death, divorce or other unforeseen circumstances. “It’s always a good idea to set yourself up with a little bit of financial independence,” Mazek says.

For example, Allen recalls one client, a female politician who was going through a divorce. Despite holding a high-powered job in corporate America, she had completely turned over all of the household finances to her husband, a CPA and negotiations attorney, who put all of the assets in his own name, Allen says. After filing for divorce, “she discovered he had been making frequent trips to the Cayman Islands, and [she] did not know the numbers to her local bank accounts,” Allen says.

The couple jointly owned several businesses worth several million dollars, but the husband said the businesses were not profitable. With no knowledge of either the businesses or the couple’s financial dealings, the wife had no way to refute this claim, Allen says. As a result, a deal was negotiated in which the husband retained ownership of the businesses while the wife got the house — minus the furniture — and a $325,000 alimony payment.

Even couples in happy marriages have to plan for the unexpected. Tiffany Welka, vice president and accredited wealth management advisor at VFG Associates in Livonia, Michigan, recalls one woman who learned that lesson the hard way. Her husband of more than 30 years handled their finances and had most of their financial accounts in his name only, listing her as a beneficiary. That became a problem when he suffered a stroke and was unable to make financial decisions or even pay their bills. “During this extremely trying time in their lives, she had to go to court in order to access their financial accounts just to stay afloat on their day-to-day bills,” Welka says.

Because a beneficiary has no claim to an account unless the account holder dies, Welka suggests married couples, or those in long-term relationships who share expenses, have both names on all their accounts. Joint names can be listed on most investment accounts, such as bank and brokerage accounts, as long as they aren’t a tax qualified account, such as an IRA or 401(k), Welka says. “If an emergency occurs, then the other spouse will still be able to maintain the household finances,” she says.

Unmarried couples also will need to address ownership of shared assets in the event of one partner’s death. Along with naming each other as beneficiaries, these couples should consider setting up a revocable living trust, in which you place your assets, particularly those that you jointly own. You as the trustee can change the trust any time while you’re alive, but when you or another trustee dies, the trust becomes irrevocable. Assets in the trust not only avoid probate but ensure that your partner has a claim to that property.

[Read: 7 Estate Planning Mistakes You Can’t Afford to Make.]

Gearig says such a trust is especially important for unmarried couples or a cohabiting couple that has children. “If one of you dies, you want to make sure your heirs are correctly designated,” she says. An unmarried partner doesn’t have the same legal claim as a spouse, so without a revocable trust or “beneficiary designation, all assets will be decided in probate court,” Gearig says.

https://finance.yahoo.com/news/why-women-own-investments-140000626.html

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