Embrace Your Feminine Side When Investing

women make better investorsEasy boys … It’s not what you are thinking!

What I mean is that women are generally more level headed, calculating and conservative that men are when it comes to money.

Not to mention, they can deal with stress a lot better that we can. Just look around and see if you can juggle as many things (Successfully that is!) at once that your Mom or your wife can.

I got inspired to write about this after I bumped into this post:  “Why you should invest like a girl” 

 As it turns out, it’s not. A growing body of research shows that men are more emotional than women in ways that can be detrimental to their success as investors — and women generally make better money managers, even in the highest-risk folds of the industry.

In 2001, researchers at the University of California, Davis analyzed the stock investments of 35,000 households and found that men traded 45 percent more than women, racking up more transaction costs and netting returns that were 1.4 percent lower. The numbers were even more pronounced for single men and women: 67 percent more trading and 2.3 percent less in returns.

In many ways, our overconfidence hurts our bottom line when it comes to investing. I know that’s a hard pill to swallow but keep reading boys!

The latest data comes from Vanguard, the mutual fund company. Among 2.7 million people with I.R.A.’s at the company, it found that during the financial crisis of 2008 and 2009, men were much more likely than women to sell their shares at stock market lows. Those sales presumably meant big losses — and missing the start of the market rally that began a year ago.

Male investors, as a group, appear to be overconfident, said John Ameriks, head of Vanguard Investment Counseling and Research and a co-author of the study. “There’s been a lot of academic research suggesting that men think they know what they’re doing, even when they really don’t know what they’re doing,” he said.

Women, on the other hand, appear more likely to acknowledge when they don’t know something — like the direction of the stock market or of the price of a stock or a bond. (read more)

 

Women put safety first. They are also more inclined than men to wear seat belts, avoid cigarette smoking, floss and brush their teeth and get their blood pressure checked. They even have been shown to be 40% less prone than men to run yellow traffic lights. Not to mention their innate ability to deal with stress and pressure.

In general they are also less prone to attribute success or failure to event outside of themselves like fate or luck.

I don’t know what to make of this data, but the more I dug the more I found making the case for women as being stronger investors and financial decision makers. Something to think about when it comes to putting teams together, from household to corporate teams.

So nothing to fear my friends … If you can’t beat’em join’em 🙂  They seem to be better at this money thing than we are!

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