In this kind of market, the moves most likely to benefit you in the long run require confidence. Investors with the nerve to move against the herd are those that typically win. The is down more than 8 percent since its high in the middle of 2015, and the beginning of 2016 has been marked by nerve-shattering turbulence.
Unfortunately for women, confidence as investors is exactly what they lack, based on a recent research. While men's biggest investment mistake is arguably overconfidence — they trade too often, trying to time the market — women have the opposite problem.
Women's biggest mistake as investors is self-doubt: a lack of confidence that can lead to inaction. Some of the self-doubt is internal, some from cultural factors, and experts argue that some comes from the mind-set of the financial services industry, which has been slow to adapt to the rise of women as an economic force.
Women control $11.2 trillion of investable assets in the United States, according to a study by Sylvia Ann Hewlett and Turner Moffitt at the Center for Talent Innovation. "Where investing is made accessible and approachable for women, women not only invest more but are better investors," said Sallie Krawcheck, the former top Wall Street executive now working on an online financial advisor called Ellevest, aimed at women, which is set to launch this year.
Women are basically as financially literate as men: 35 percent of U.S. women and 39 percent of men passed a literacy assessment. But American women, despite being among the most financially literate women in the world, are 44 percent less likely than American men to consider themselves knowledgeable, according to Hewlett's and Moffitt's study.
The lack of confidence carries a big cost. For instance, more young women than young men defer retirement planning in their 20s, according to the Employee Benefits Research Institute. They take Social Security early, cutting their lifetime benefits. And financial advisors have long noted that wives often defer to their husbands, even though research shows that generally speaking, women are better investors than men.
"The women we're talking to at Ellevest say they've got stacks of investment research," said Krawcheck, "They're going to invest as soon as they read it, as soon as they figure it out. Which ends up being never."
Krawcheck, long known as the most powerful woman on Wall Street, was CEO of wealth management firm Merrill Lynch during its acquisition by Bank of America; she left in 2011. Ellevest is backed by $10 million in funding from some of the biggest names in the investment business, including Chicago-based research firm Morningstar and Mohamed El-Erian, chief economic adviser at Allianz.
Some of the other reasons behind some women investors' lack of confidence are complicated and probably deeply cultural, said experts. Parents even treat their sons and daughters differently when it comes to teaching them about money: They talk to their sons about money more than they talk to their daughters about it, and boys have earlier access to credit cards, according to a survey by Baltimore, Maryland-based T. Rowe Price.
In some cases, educated, independent, breadwinning women seem to have an aversion to the idea of being an investor. About five years ago the Washington, D.C.-based Women's Institute for a Secure Retirement was running a series of investment seminars to help a group of nurses prepare for retirement. The institute was interested in part for research purposes, because nurses would be highly educated and, presumably, interested in investing.
What happened, though, stunned M. Cindy Hounsell, the institute's president. The group held the seminars, but hardly anybody came. "One or two people," Hounsell remembers.
The team changed the names of the seminars so that they were no longer about "investing." Instead, they were about "financial security."
The room filled up. "Women don't consider themselves investors," Hounsell says. "There has to be a whole mind-set shift to bring more women into the circle."
Krawcheck, Hounsell and Judith Ward, senior financial planner and vice president at Baltimore-based fund company T. Rowe Price, suggested a few steps for women to take if they are looking to overcome their fear of investing and build confidence. Women need the higher returns that come from investing, because they live, on average, almost five years longer than men.
Just start. Experts said women seem to delay too long on the front end. "I don't know if it's women's lack of confidence versus not knowing where to start," said Ward. "It just seems like men are more willing to take a plunge."
The most important rule for women is to begin, with the safest long-term route being a low-cost, diversified portfolio. You'll probably lose more money delaying a year than you would by making a mistake with that kind of investment portfolio.
Women's reluctance to invest may be similar to their reluctance to ask for a raise. "Trying to get a promotion, they feel like they need to be 90 percent. Men think half is good enough," said Ward.
Find an advisor you like and/or trust enough to use. One reason that women might be checked out of investing is that they don't like their financial advisors. One sign of this, said Krawcheck, is that if the male half of a couple dies, the women leave their joint financial advisor at a rate of 70 percent. Her advice: Meet as many times with an advisor as you need to — even if that is five or six meetings. But if you don't feel comfortable, move along.
Persist even when it seems like the investing isn't for you. Krawcheck and others have long observed that the male-dominated investment industry isn't particularly welcoming to women. Only about 3 in 10 financial advisors is a woman. For instance, women are thought to be more goal-oriented around the idea of taking care of loved ones and see themselves as savers rather than investors. But the investment industry often focuses its marketing on the idea of returns. In another example, investment company marketing often focuses on what the investment company provides rather than what the client needs.
"The investment industry, as it has been constructed, does a very good job for men," said Krawcheck.
Take, she said, a feature like tax-loss harvesting, a feature that involves selling losing investments so that investors can write off the loss on their taxes. It has become a standard on some new online investment platforms. "It's very in the weeds and technical," she said. "I have been in the industry for [a long time]. ... I've never had a woman ask me about tax-loss harvesting."
Don't put your investments on long-term autopilot. One of women's strengths as investors is that they are less tempted to buy and sell in the short term, based on classic research by Brad M. Barber and Terrance Odean at the University of California-Berkeley. But at least once a year, you need to become an active investor, checking your asset allocation as you age and your needs change. That means changing your asset allocation when it's required, or hiring an investment advisor or an online investment platform to do it for you. "This was my own mistake in 2008. ... I didn't have cash, and I was fairly close to retirement," said Hounsell.
And remember, the stakes are high: Single women, including widows, are the most likely to run out of money in retirement, according to the Employee Benefits Research Institute. You need the higher returns over time that come from investing in stocks and bonds.
— By Elizabeth MacBride, special to CNBC.com