Who are Better Investors, Men or Women?
Traditionally, women are more cautious investors while men tend to save more, but are bigger risk takers. One investment writer said that today “women are generally model investors,” while men still take unnecessary risks. While the data shows that women generally do better than men when it comes to standard investing practices, fewer differences persist.
A recent national survey published by USA Today showed that women tend to make better investors because they research investments in depth before making portfolio decisions and they are more patient since men are more prone to market impulses.
When it comes to employee retirement plans, women are more likely to participate in their employer’s 401(k) retirement plan. They create ways to ensure that their contributions remain steady which is one of the keys to help grow the returns by the time they are ready to tap the funds.
According to one Vanguard study, 66 % of women participate in voluntary contributions to their 401(k) accounts compared to 58% of men. In a recent USA Today article, “Women are Mostly Better Investors than Men,” Nelli Oster, the author says that “women tend to focus on longer-term, non-monetary goals. Instead of merely viewing money as a means to purchase something, they consider money to represent independence and security.”
Women Seek Advice
The article also notes that women are more likely ask for direction on investments whereas men are more likely to make decisions on their own without seeking professional advice or guidance.
One problem for men, according to Chip Hymiller, a financial planner in North Carolina, men tend to be “more trigger-happy.” When a stock in their plan starts to go down in value, 11 percent of men will make a trade and dump the stock and try to buy a better-performing one.
And another investment advisor said that in general women have “a lack of confidence in their knowledge of financial planning and investing” that the advisor believes is really self-imposed.
The advisor went on to say that an analysis of more than 12 million investors shows that women actually demonstrated stronger saving rates than their male counterparts and enjoyed better long-term investment performance when they did engage. Unfortunately, too many women still hesitate to take control of their finances.
Future for Women
The reality is that 90% of women will have to manage their personal finances on their own at some point in their life. That is why it is imperative for women to develop a solid understanding of how to manage their money so that they can make good decisions about their investments.
In part two of our program, we will summarize the differences between men and women and their investment success and attempt then to answer the question, “Who are better investors; men or women?
### Larry Marvin
LifeCrafter – Money $ense
- ©2016 Larry Marvin, Image Credit: Charging Bull by Sam Valadi CC flickr 22JUL2011 ↩