Women are Natural Born Investors

According to research from the University of California, women investors consistently outperform their male counterparts with investment returns.  So, are women natural born investors? As a financial advisor working with women, I know they are!

Here are 7 reasons why:

1.     Women do their homework and research more thoroughly before investing.

2.     They are better at matching their investments to their goals.

3.     They trade less.

4.     They remain calmer during stock market ups and downs.

5.     They employ a disciplined approach to investing.

6.     They are natural collaborators.

7.     They are good savers.

Women invest wisely.

Women are more likely to invest in what they know and understand.  Women make about 70% of the household purchases. We use our eyes and ears for our research tools.  In charge of your family's travel?  You may notice new trends in the travel industry and take advantage of opportunities to invest in an airline or cruise company. 

Women tend to approach investing as a long-term play.  They are good at figuring out their financial goals and then picking the investment strategy that best fits their time horizon and risk tolerance. Women are not as tempted as men to chase the next hottest trend. They have better self-control.  Also, when you have a long-term perspective on investing, you do less buying and selling.  Because of this, you will pay less in taxes and commissions. 

Women panic less

When the market starts to look like a rollercoaster, women tend to panic less and instead follow a disciplined approach to their investing. Women like to have a plan. During market downturns, we revisit our plan and remind ourselves of our investment strategy, and then continue on with our lives. 

We are natural collaborators.  Women are more comfortable seeking professional help to manage their money. Women also tend to save more due to our gatherer nature and the need to feel secure.

Women need more confidence.

Even though women have these innate advantages when it comes to investing, there is still a sizable wealth gap between men and women.  Men are more comfortable investing their money in the stock market. In contrast, women feel safer putting their money into a savings account. This hurts women in the long run because investing in the stock market allows you to participate in the growth of companies and receive dividends thus building your wealth; whereas savings accounts give very little growth and may actually reduce your wealth due to inflation.  

Women, it’s time to embrace your natural investing ability.  If you need help getting started and want to work with a fiduciary financial advisor, please schedule a call to find out if we are a good fit.