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USA Real Estate Blog

Why women are better investors than men – Sabrina Kessler – Medium

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Women and men are as different as chalk and cheese. While men are venturesome, sometimes pretentious, braver by nature and always adventurous, women often exercise restraint. We hesitate frequently before deciding, fly by the seat of our pants, prefer the certainty and, if in doubt, take the status-quo over unfamiliar terrain any day. Don’t get me wrong here, I don’t want to perpetuate stereotypes at all. But to be honest, it definitely takes the biscuit. And to explore whose the best investor — man or woman — these characteristics loom large.

What sounds like a buzzkill at first sight, surprisingly turns out to give us a cutting edge in terms of finance. Dozens of studies over the last years have proven that female characteristics conduce to success when it comes to investment decisions. Not only do we save more money than men, we also emerge to be the better or even the best investor: Figures show that female investments perform better (by 0.4 percent). This number may appear marginal. But projecting it over years makes a difference of more than $250.000 between men and women.

(Credit: w-t-w.org)

As depicted above, figures finally prove that the cliché of males being the best investor has served its time. But since finance is still a male preserve and comparatively less women call theirselves investors, it’s kind of an unexpected revealing that females apparently have a better understanding of investment. Luckily, researchers supply good and reasonable causes for that.

The best investor evinces these characteristic traits

According to Fidelity, an international financial services company, woman yield better crops due to what some would call “inherently female”. Women…

  • invest with a holistic intent

Instead of focalizing on performance, women target at family and life time goals which is why their strategy is more conservative and long-term oriented. Hence, they direct their attention mainly on “buy and hold” other than switching stocks due to market volatility.

  • avoid risks and favor security

When it comes to savings, women are more likely to invest in age-based and widely spread products. While men are often fully invested in (risky) equities, their counterparts prefer target date funds which provide a bigger allocation.

Enter unknown territories and new avenues is definitely not what most women are mad about. In the majority of cases, we are quite comfort with the status-quo and avoid toing and froing: As data reveals, women are 35 percent less likely to make trades. Thus, they save plenty of fees and are more like to outperform.

Although these facts speak volumes, most women are still at loose ends. None of my female friends is really proficient in finance even though they’re quite eager for some learnings. But where to start and how to get a good or even the best investor if you have no clue at all?

Three Steps: How you can start investing

The easiest way is simply asking family and friends. Even though they might not be familiar, too, nearly everybody has some points of contact, if only regarding a pension plan or certain insurances. Personally, I was a complete layman myself back in my college days and knew as much about finance as the man in the moon. Exchanging experiences with my father helped me a lot to at least build up a basic understanding. Hence, learning from “the oldies” is definitely worth a mint. And I would take him over a financial advisor at any day.

Besides gathering some information, you should right the financial ship. Before investing any money, you should obtain an overview of your banking accounts and settle them properly. You always need to know what you own and what you owe before investing money which is actually needed for debt redemption.

Last but not least: Settle some financial goals and get straight in your mind about what you want to achieve. Do you want to finance your retirement? Do you need money for housebuilding? Or do you target financial freedom? Every goal serves different needs and therefore demands different monetary plans. Once you’ve realized what you really want, you already made the entering wedge! And you perhaps clear the way for you to get the best investor you can be.

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