4 Tips for Women to Overcome Their Financial Fears

There are no shortage of studies that illustrate the differences between female and male investors ^[1]. The findings are consistent: women report being less confident about investing, are often more risk-averse and more frequently defer to their spouse for investment decisions.

Yet despite these behavioral differences, women are also known to be more pragmatic in their investment strategies than their male counterparts. Men have been pegged for overconfidence; trying to beat the market and actively trading away investment gains in the process. Studies have shown women more frequently opt for long-term, diversified investments.

The result? According to a 2013 Fidelity study ^[2], women achieved virtually the same rate of return as men over a 10-year period.

[Read: The Panama Papers: What Is a Tax Haven?^[3]]

For most women, the self-imposed lack of confidence is not only unfounded, but it is also a significant risk to their overall financial security. On average, women live about five years longer than men, so it's important they have a handle on their finances before the golden years. Aside from longevity, as a practical matter, both spouses should really be involved in family finances and developing an ongoing investment strategy for their combined wealth.

The Fidelity study shows that in addition to achieving virtually the same rate of return as men, women also tend to be better savers ^[4]. Despite earning two-thirds what their male counterparts do, women typically save 8.3 percent of their pay versus 7.9 percent for men, even after adjusting for compensation. The study also found that women were more focused on their entire financial situation, whereas men were skewed towards investment returns. While returns are an important component of an investor's overall financial situation, it is only a piece and cannot be disconnected from the rest of the picture.

Confidence can be a powerful thing, especially when investing. But having too much confidence can actually derail a solid financial strategy. We've all seen what can happen when investors get spooked by down markets – they sell low during turbulent patches and try to re-enter the market when it's strong and prices are high. While some investors make this common mistake, others make another: they try to time the market and take advantage of potential value opportunities. As attractive as this strategy sounds, in reality it is extremely difficult to beat the market and many investment professionals don't even try. The Fidelity study showed that women tend to stay the course during market swings – they didn't get spooked or take on unnecessary risk.

[Read: 8 Tips to Create Income From Rental Property ^[5].]

Whether you're married, single, or working with a financial advisor, there are strategies to build financial acumen and deepen your involvement in how your savings are managed.

Learn the basics. There are plenty of resources available ^[6] from reputable organizations that can help fill in any gaps in your investment education. Understand the differences between exchange-traded funds, mutual funds, index funds and fixed income investments. Knowing the fundamentals of asset allocation will be helpful as you review your investments.

Assess your situation. Take a look at your current strategy – are you participating in your employer's retirement plan? Does the plan have any special features? Are you investing in an IRA, Roth IRA ^[7], or brokerage account? Take a look at asset composition across your portfolio holdings.

Consult a fee-only financial advisor. Investors are sometimes reluctant to work with an advisor if they feel undereducated on investments. Although that may seem like a good reason to ask a professional ^[8], it's understandable some to feel reluctant to seek outside counsel without having the knowledge to evaluate the advice. Fee-only financial advisors do not receive commissions and are held to the higher fiduciary standard for their clients, which differ from fee-based or commission-driven advisors. A fee-only advisor can help investors address the questions that keep them awake at night – such as whether you'r e saving enough for retirement and how a market downturn could impact your portfolio.

[Read: 3 Investing Tips to Last for the Next 365 Days ^[9].]

Embrace the differences. It's true that there are plenty of behavioral differences between men and women ^[10] when it comes to investing, but that isn't necessarily a bad thing. Research has shown that women tend to be better savers than men and more realistic about performance expectations. So rather than try to emulate the investment traits of men, women should recognize the value their approach brings to the table and get involved in the conversation.

Financial markets are very complicated. Between the investment products, changes in the global economy and shifts driven by political and legislative forces, it's virtually impossible for any individual investor to feel like an expert. But it is possible to familiarize yourself with the fundamentals to participate in strategic discussions.

For women, it's important to understand that men aren't inherently better investors; they are just more confident in their approach.