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Markets in a Minute

Female Breadwinners Have Doubled, But Barriers Remain

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female breadwinners

female breadwinners

This Markets in a Minute chart is available as a poster.

The Rise of Female Breadwinners

Who is the higher income earner in your family?

Over time, the U.S. has seen a rise in female breadwinners. In fact, the proportion of women who earn more than their male partners has almost doubled since 1981.

Today’s Markets in a Minute chart–from New York Life Investments–illustrates the historical trajectory of women’s earning power, as well as systemic challenges women still face.

Then and Now: Gaining Ground

In the last 40 years, there has been considerable progress in both the percentage and number of female breadwinners.

 19811991200120112018
% Female Breadwinners16%21%24%28%29%
# Female Breadwinners4.1M6.5M8.1M8.8M9.6M

For families that had dual incomes, only 16% of households in 1981 had a female breadwinner. This was equal to about 4 million women across the country at the time.

Fast-forward to the present, and close to 10 million married, female breadwinners were part of the U.S. labor pool in 2018.

Breakthroughs Could Link to Education

Higher education rates and rising earning power are helping to decouple women from pre-existing financial stereotypes.

For married female breadwinners*, the impact of education often plays out as follows:

Education level
% of Women Earning Equal or More Than Partner
More education than partner49%
Same education as partner29%
Less education than partner20%

Source: Pew Research Center
*Over age 25

The odds of a woman earning the same or more than her partner skyrockets nearly 250% if she has more education, compared to if she has less education.

Interestingly, when it comes to career trajectories, women and men share similar decision-making rationales. Among surveyed women, 83% were more likely to delay having kids in order to advance their careers, compared to 79% of men. The primary reason: to help secure a stronger financial standing for their future children.

While it is clear that women have become a growing financial force over time, they still face many persistent challenges today.

A Chorus of Systemic Barriers

Women experience a litany of headwinds, both overt and subtle. What are some variables that continue to have a pervasive impact on women’s finances?

Media Bias
According to one study, 65% of media language directed towards women and their finances surrounded “excessive spending”. In contrast, 70% of language towards men discussed “making money” as a masculine ideal.

Financial Well-being
According to a global survey, 85% of women manage day-to-day expenses as much as or more than their spouse. However, 58% of women defer long-term financial and investment decisions to their husbands.

Gender Wage Gap
Based on the median salary for all men and women, women earn 79 cents for every dollar men make in 2019. The gap starts small and continues to grow as people age. How can women close the gap? The Georgetown Center on Education and the Workforce has some advice:

  • Get one more degree
  • Pick a high-paying college major, such as the STEM fields
  • Negotiate starting pay

If current earning trends continue, women will not receive equal pay until 2059.

Leadership Roles
While more women are in the workforce compared to previous generations, they tend to be in lower positions.

Women in S&P 500 Companies

RoleWomen's Representation in Role
CEOs5.8%
Top Earners11.0%
Board Seats21.2%
Executive/Senior-Level Officials and Managers26.5%
First/Mid-Level Officials and Managers36.9%
Total Employees44.7%

Why are there so few women CEOs? Men dominate management roles that influence the company’s bottom line, such as COO or sales. On the other hand, female executives typically fill roles in areas like human resources or legal—which rarely lead to a CEO appointment.

The Road Ahead

The last 40 years have shown immense progress, yet there is still plenty of room for further advancement.

Women belong in all places where decisions are being made… It shouldn’t be that women are the exception.

—Ruth Bader Ginsburg, U.S. Supreme Court Justice

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Markets in a Minute

Asset Class Risk and Return Over the Last Decade (2010-2019)

Asset allocation is one of the most important decisions an investor can make. This chart shows asset class risk and return from 2010-2019.

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Asset Class Risk and Return

This Markets in a Minute Chart is available as a poster.

The Importance of Asset Classes

Asset allocation is one of the most important decisions an investor can make. In fact, studies have found that the percentage of each asset type held in a portfolio is a bigger contributor to returns than individual security selection.

However, it’s important for investors to select asset classes that align with their personal risk tolerance—which can differ based on how long they plan to hold an investment—and their targeted returns. This Markets in a Minute chart from New York Life Investments shows asset class risk and return data from 2010-2019 to highlight their different profiles.

Asset Class Risk and Return

To measure risk and return, we took annualized return and standard deviation data over the last ten years.

Annualized returns show what an investor would have earned over a timeframe if returns were compounded. It is useful because an investment’s value is dependent on the gains or losses experienced in prior time periods. For example, an investment that lost half of its value in the previous year would need to see a 100% return to break even.

Standard deviation indicates risk by measuring the amount of variation among a set of values. For example, equities have historically seen a wide range in returns, meaning they are more volatile and carry more risk. On the other hand, treasuries have typically seen a smaller range in returns, illustrating lower volatility levels.

Below is the risk and return for select asset classes from 2010-2019, organized from lowest return to highest return.

Asset ClassAnnualized ReturnAnnualized Standard Deviation
Global Commodities-5.38%16.60%
Emerging Markets Equity-0.89%16.95%
Treasury Coupons0.73%0.81%
Investment Grade Bonds3.17%2.92%
Hedge Funds4.05%5.70%
Corporate Bonds5.55%5.26%
Global Listed Private Equity5.59%18.63%
1-5yr High Yield Bonds6.71%1.00%
Global Equity6.75%12.50%
Global Equity - ESG Leaders6.87%12.03%
Taxable Municipal Bonds7.20%7.33%
Real Estate Investment Trusts8.44%11.03%
U.S. Mid Cap Equity11.00%13.60%
U.S. Large Cap Equity11.22%11.39%
Dividend-Paying Equity11.81%10.24%
U.S. Small Cap Equity11.87%14.46%

Note: See the bottom of the graphic for the specific indexes used.

Global commodities saw the lowest return over the last 10 years. Plummeting oil prices, and an equities bull market that left little demand for safe haven assets like precious metals, likely contributed to the asset class’ underperformance.

Backed by the U.S. federal government, Treasury coupons had the lowest volatility but also saw a relatively low return of 0.73%. In contrast, 1-5 year high yield bonds generated a return of 6.71% with only slightly more risk.

With the exception of emerging market equity, all selected equities had higher risk and relatively higher historical returns. Among the stocks shown, dividend-paying equity saw the highest returns relative to their risk level.

Building a Portfolio

As they consider asset class risk and return, investors should remember that historical performance does not indicate future results. In addition, the above data is somewhat limited in that it only shows performance during the recent bull market—and returns can vary in different stages of the market cycle. For example, commodities go through multi-decade periods of price ascent and decline known as super cycles.

However, historical information may help investors gauge the asset classes that are best suited to their personal goals. Whether an investor needs more stability to help save for a near-term vacation, or investments with higher return potential for retirement savings, they can build a portfolio tailored to their needs.

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Markets in a Minute

The Pyramid of Equity Returns: Almost 200 Years of U.S. Stock Performance

From 1825-2019, equities have had positive annual performance over 70% of the time. This chart shows historical U.S. stock market returns.

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historical stock market returns

This Markets in a Minute Chart is available as a poster.

Historical Stock Market Returns

After the fastest bear market drop in history, the S&P 500 rallied and now has a year-to-date total return of -4.7%. The year is not over, but in the context of history, is this in line with what’s considered a “normal” return, or is it more of an outlier?

In today’s Markets in a Minute chart from New York Life Investments, we show the distribution of U.S. equity returns over almost 200 years.

Total Returns By Year

The chart shows total annual returns, which assumes that dividends and other cash distributions are reinvested back into the index.

It’s also important to note that different indexes and data collection methods are used over the timeframe. From 1825-1925, numbers come from researchers at Yale University and Pennsylvania State University. They collected price and dividend data for almost all stocks listed on the New York Stock Exchange during its early history.

From 1926-1956, returns are from the S&P 90, the S&P 500’s predecessor. Finally, from 1957 to date, returns are based on the S&P 500.

Here are historical stock market returns by year:

YearTotal Return
18252.53%
18262.03%
18272.97%
18282.82%
18293.21%
18302.83%
18311.70%
18323.02%
18332.94%
18342.91%
18352.83%
18361.59%
18372.11%
18386.27%
18395.28%
18403.53%
18414.87%
18425.77%
18437.18%
18446.85%
18454.16%
18463.36%
18475.55%
18485.17%
18497.60%
18503.73%
18514.44%
18524.52%
18534.11%
18541.99%
18552.09%
18563.00%
18573.39%
18582.83%
18592.86%
18602.41%
18613.21%
18623.60%
18633.52%
18644.18%
18653.97%
18664.39%
18674.50%
1868-
18694.18%
18704.20%
18715.86%
18726.33%
18736.51%
18747.47%
18756.61%
18766.86%
18775.31%
18785.54%
18795.80%
18805.28%
18815.48%
18825.32%
18835.65%
18845.81%
18855.53%
18864.23%
18874.43%
18884.36%
18894.28%
18904.14%
18914.78%
18924.44%
18934.54%
18944.76%
18954.42%
18964.17%
18974.27%
18984.21%
18993.72%
19004.98%
19014.66%
19024.15%
19034.35%
19044.72%
19054.00%
19064.19%
19074.47%
19086.09%
19094.87%
19104.56%
19115.19%
19125.27%
19135.12%
19145.22%
19155.85%
19165.91%
19177.04%
19188.38%
19196.71%
19205.72%
19216.75%
19226.98%
19236.04%
19246.43%
19255.91%
192611.62%
192737.49%
192843.61%
1929-8.42%
1930-24.90%
1931-43.34%
1932-8.19%
193353.99%
1934-1.44%
193547.67%
193633.92%
1937-35.03%
193831.12%
1939-0.41%
1940-9.78%
1941-11.59%
194220.34%
194325.90%
194419.75%
194536.44%
1946-8.07%
19475.71%
19485.50%
194918.79%
195031.71%
195124.02%
195218.37%
1953-0.99%
195452.62%
195531.56%
19566.56%
1957-10.78%
195843.36%
195911.96%
19600.47%
196126.89%
1962-8.73%
196322.80%
196416.48%
196512.45%
1966-10.06%
196723.98%
196811.06%
1969-8.50%
19704.01%
197114.31%
197218.98%
1973-14.66%
1974-26.47%
197537.20%
197623.84%
1977-7.18%
19786.56%
197918.44%
198032.42%
1981-4.91%
198221.55%
198322.56%
19846.27%
198531.73%
198618.67%
19875.25%
198816.61%
198931.69%
1990-3.10%
199130.47%
19927.62%
199310.08%
19941.32%
199537.58%
199622.96%
199733.36%
199828.58%
199921.04%
2000-9.10%
2001-11.89%
2002-22.10%
200328.68%
200410.88%
20054.91%
200615.79%
20075.49%
2008-37.00%
200926.46%
201015.06%
20112.11%
201216.00%
201332.39%
201413.69%
20151.38%
201611.96%
201721.83%
2018-4.38%
201931.49%

Source: Journal of Financial Markets, Slickcharts. The year 1868 has insufficient data to estimate a total annual return.

U.S. equity returns roughly follow a bell curve, meaning that values cluster near a central peak and values farther from the average are less common. Historically, they have been skewed towards positive performance.

Here is how the distribution of returns stack up:

Total Annual Return (%)-50 to -30-30 to -10-10 to 1010 to 3030 to 5050+
Number of Years Within Range3237765225
Percent of Years Within Range1.5%11.8%39.5%33.3%11.3%2.6%

While extreme returns can happen, almost 40% of annual returns have fallen within the -10% to 10% range.

Recessions and Recoveries

What does it look like when more abnormal returns occur? Due to the cyclical nature of the economy, recessions tend to be followed by strong recoveries.

recession and recovery stock market returns

In 1957, the year the S&P 500 was created, the stock market saw a loss of almost 11%. Stock prices shot up by over 43% the following year, bolstered by rising credit volumes and business profits.

Most recently, the 2008 global financial crisis led to one of the largest equity losses to date. In 2009, stocks climbed by almost 27%, boosted by expectations of higher capital spending and demand as the economy recovered.

What History Tells Us

While equities can have high volatility, returns have historically followed a positively-skewed bell curve distribution. From 1825-2019, the average total annual return was 8.25%. In fact, over 70% of total annual returns have been positive over the same timeframe.

Owning stocks long-term may help investors not only beat inflation, but also build a nest egg that may sustain them throughout their retirement years.

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