In a newsletter article back in 2018, we posed the question “Are women better investors than men?” The answer was a resounding “yes.” Let’s look forward to today and see if that has changed. Based on multiple studies, it has not. Women still possess the traits that make them better investors.

 

There are still behavioral differences that tend to give women better investment results.

Less frequent trading. Women trade less frequently than men. This saves them in transaction costs. It also works to take the emotion out of investing and lessens the chances of emotional trades during market volatility.

 

Buy and Hold Philosophy. Women are more likely to stick with their investments instead of trying to time the market. Market timing means the investor has to be right twice. Once as when to get in and again as to when to get out.

 

Risk awareness. Women are more risk adverse and they tend to understand potential downsides. They may be more interested in reaching their goals as opposed to rate of investment returns. Men tend to be fueled by risk and are more comfortable when risk increases. They also tend to talk about investing with sports analogies, “hitting a grand slam” or “winning the race.”

 

As advisors, we work with both men and women and it is in everyone’s best interest that we recognize the differences in investment styles and behaviors. Investing is not a one-size-fits-all approach and tailoring strategies to everyone involved will result in more successful investing.