The article “Women Are Increasingly Taking the Financial Reins — and That’s a Good Thing” was originally published on The Financial Post on November 6, 2015.

Would you be insulted if someone told you that you “invest like a girl”? Studies suggest that a more appropriate reaction would be to feel flattered.

Negative stereotypes of women as shopaholics and “gold diggers” have done nothing to enhance their financial reputation, and have done much to maintain the impression that money and investing are, as they have historically been, the domain of men. But most men could stand to learn a thing or two from a more literate investor — and the fact is, she’s likely right beside them.

According to a new report titled “The Literate Investor” from investment services firm Pavilion Investment House, women may be better investors than men.

“A societal shift inside and outside of the home is resulting in women taking a more active role in making investment decisions for themselves and their families,” the report says. As a financial planner, I can attest to this change first-hand.

One of the most stark examples of this shift can be observed along generational lines. Many elderly couples I work with are headed by men who have always controlled the purse strings. The wives are often younger and likely to live longer, and are, unfortunately, frequently tasked with learning about how to manage the family finances as their husbands grow older, become sick or die. Sometimes, children end up coming to the rescue of poor mom, who may not be equipped to learn about money management in her senior years.

At the other end of the spectrum, I observe that younger women are more frequently playing the role of the dominant financial decision-maker in a couple. Pavilion’s study backs up this anecdotal evidence, and their report offers up some reasons for the shift.

One big reason is as simple as who is earning the money in the first place. According to Statistics Canada, in 1976 only 41.9 per cent of women over the age of 15 were in the paid labour force. As of 2009, that number had grown to 58.3 per cent. Women’s total income – in constant 2008 dollars – grew by 50 per cent during that same period, while men’s income remained virtually the same. So, not only are more women working, but their incomes are rising as well.

Education is also playing a role. StatsCan reports that in 1971, 68 per cent of university graduates were men. In 2006, the number was only 40 per cent: female university graduates, as a percentage, have nearly doubled.

As women’s education and earning ability has increased, so has their financial knowledge and participation in family finances. A 2014 Money magazine survey found that 80 per cent of women who were primary breadwinners reported being “very or extremely knowledgeable about financial matters,” versus only about half for those households where men were earning more.

A U.S. report by Financial Finesse purports that neither men nor women are saving enough these days, but that women face a greater risk of a financial shortfall in retirement. So it’s no wonder women are starting to pay more attention to their money – in many cases they have no choice.

Financial Finesse suggests that in order to replace 70 per cent of their income in retirement, women would need to save about 26 per cent more than men in dollar terms. This is because women only earn 78 cents on the dollar relative to men and they live, on average, nearly 2½ years longer. Women may be saving more in their retirement plans than men on a percentage basis, but on average, they need to save even more in both percentage and dollar terms.

Bravado and over-confidence could be seen as an impediment to successful investing

Pavilion Corp.’s report cites a well-known 2001 study – “Boys Will Be Boys” – by Brad Barber and Terrance Odean of the University of California, Davis. Based on discount brokerage firm data, the pair determined that women tended to opt for more conservative investment portfolios than their male counterparts. This is supported by other research like the 2014 Blackrock Global Investor Pulse Survey that found that only 22 per cent of women would be willing to take more risk to earn higher returns, versus 37 per cent of men.

The key finding of the Boys Will Be Boys study isn’t that women are more conservative investors, but rather, that women are better investors. The traditional view of investing is that the cavalier Bay Street wheeler dealer and their fortune-teller-like ability to predict stock market movements can lead to higher investment returns. This is an opinion that appears to be more appealing to men than women, whether it be investors or those who work in the investment industry. The Boys Will Be Boys study found quite the contrary: that female investors, despite their conservative investments, actually earned higher returns than their more aggressive male counterparts.

One of the reasons put forth for the relative underperformance of men was that the increased trading activity and resulting costs were so high that women were able to earn higher returns with less risky investments. Bravado and over-confidence could then be seen as an impediment to successful investing.

A note of caution: According to the Pavilion report, as women’s education, income and financial knowledge increase, they risk reaching the inflection point that has, in some cases, caused men to become worse investors.

In the meantime, though, it appears that “investing like a girl” — despite the out-dated negative connotations that might conjure to the uninformed — may actually be a recipe for investment success.

Jason Heath is a fee-only Certified Financial Planner (CFP) and income tax professional for Objective Financial Partners Inc. in Toronto, Ontario.