Wednesday, November 25, 2020

Hey, You Invest Like a Girl!

What an insult! No testosterone laden man would put up with a jab like that. Several studies have shown that women:
  • Often have doubts about their ability to invest
  • Don't enjoy investing as much as men
  • Are financially insecure, therefore, are unwilling to take a risk with their resources
  • Want to preserve their assets so they don't lose them
  • Don't know how a mutual fund works
And to top it all off, another study by the University of California at Davis found that women's portfolios gained 1.4% more than men's portfolios did. Some other interesting nuggets:
  • Single women did even better than single men, with 2.3% greater gains.
  • The average women's investment club outperforms the average men's investment club according to Professor Hersh Shefrin, (Santa Clara University) author of Beyond Greed and Fear: Understanding Behavioral Finance and the Psychology of Investing.
  • Women are more likely to do research before they make an investment decision, rather than to gamble on a high-flier.
  • They trade less often and the less often you trade the better your returns because you save money on commissions. Men actually traded 45% more often than women -- a result they attributed to overconfidence.
  • A Merrill Lynch study found that men are also more prone than women to hold a losing stock too long or waiting too long to sell a winner.
  • Women tend to look at more than just numbers when deciding whether to invest in a company. They invest in companies they feel good about ethically and personally. And companies with good products, good services, and ethics tend to have better long-term prospects -- and face fewer lawsuits.
Upon further review, investing like a girl might not be such a bad thing.

Full Disclosure: No position in the aforementioned securities. 

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