The difference between female and male investments
According to Warwick Business School, the rate of return on women's investments exceeds the annual FTSE 100 index by 1.94%, while for men it is only 0.14% higher. That is, the average return on women's investments is higher than the average return on companies with the highest capitalisation on the British Stock Exchange. According to a study by Fidelity Investments, women have more successful portfolios: they generate 0.4% higher returns than men. These statistics break the stereotype that investments are men's business.
Men trade 45% more often than women, according to researchers from the University of California at Berkeley in the article "Boys Will Be Boys". Men are probably more sensitive to the news and impulses in the market, so they make more deals.
Men feel more confident in the stock market. According to the U.S. Trust insights on wealth and value survey, 52% of women say they are confident in their investment abilities, while 68% of men are. And this arrogance may work against the trader. An arrogant investor will buy more when the market grows and sell more during the crisis, hoping to prevent future losses.
Women are more willing to turn to financial advisors for help, while most men invest on their own.
What can you learn from women
Invest to achieve the goal, not win the game. 46% of women don't take any chances on the stock market. They study the issue carefully and make informed investment decisions: they do not focus on productivity, but on achieving their goals. For example, it is important for them to receive dividends for a few years to save up for their child's higher education, rather than breaking personal records on speculation. Therefore, their strategies are more conservative: women are more likely to choose a way to "buy and hold" and not to pay attention to short-term volatility, i.e. volatility, the market.
Women choose shares of value, while men choose shares of growth. Equities in value are shares of stable companies that have shown steady results over the years and paid dividends. Women analyze the return on shares of these companies for previous periods and hope to get similar profits in the future. Men are more likely to invest in shares of technologically advanced, young companies in order to earn on the growth of quotations.
Some experts criticize such a conservative approach: if you plan to invest in a long-term period, you may adopt a more aggressive strategy. For example, a 35-year-old employee with a steady income who wants to earn a pension supplement may take a risk and invest in stocks for which income is not guaranteed. On the other hand, they can bring her a higher yield than bonds, despite the volatility in the short term.
Control your emotions and use your intuition.
Women are cautious and in some cases more disciplined than men. Of course, much depends on the individual characteristics and temperament of the person.
Women have a developed empathy. They understand the market mood better than men and remember that behind each of its fluctuations are people and their perception of the news women are well aware of the psychology of investment. This quality is particularly helpful in managing venture capital investments, i.e. investments in start-ups, as interaction with company founders is important here. Australian scientists in the study "The Gender Face-Off: Do Females Traders Come Out On Top" explain women's success in investing with their developed "trading" intuition.