Are Women Better Investors than Men, or is it Just Me?
Are women better investors than men? Don’t roll your eyes. Now, before you go and write this off as another sexist generalization, hear me out. In several recent studies, it has been shown that when it comes to making long-term investments, women consistently outperform men. It turns out that there are a few key reasons why women make better investors: they are more patient, they are more risk averse, and they do better research. My husband thinks it is not about your gender; he thinks I am just smart.
According to a Fidelity study though, it is not just me. Fidelity conducted a study over a ten year period of their female customers and found on average, the female portfolios outperformed the male portfolios by an average of 40 basis points. Women also invested a higher percentage of their income. More studies by Goldman Sachs, Morning Star and a new study in 2021 by Fidelity only backed up the claim that women are better investors.
But why? What makes women better investors than men? My own personal favorite stock investment story may help explain why women may be better investors. Or could it have just been luck?
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Women often do better and more research before investing in stocks.
Back in 2010, as we were about to get married, my husband moved one of his Ameritrade accounts. In the process my husband took two thirds of the amount and he graciously gave me one third to invest. Thank you honey! (To be fair, he had this money to share as he had done and still does very well for himself in the stock market.) He immediately invested his dedicated portion of the money into several stocks. I, however, wanted to do my research first.
A few weeks later, I was driving and caught an interesting segment on about Tesla on NPR news. Back then, I was already obsessed with their first generation Roadster cars, the first legal electric car on the road. So my ears perked up and I listened. They noted that Tesla was opening a new factory in Silicon Valley and they were about to IPO. I immediately called my husband and told him I decided I want to invest my allotted money in Tesla when it IPO’d.
Women tend to invest into a project instead of a fad.
My husband wanted to know how much of my allotted money I wanted to invest in Tesla and I said “All of it!” He was stunned and wanted to make sure I was making the right decision. Luckily for us, I still said yes. I remember hearing Jim Cramer screaming Tesla was going nowhere, but I believed not only did Tesla have great ideas, they had the money behind them to actually make those ideas happen.
Women tend to hold onto stocks longer.
While the two thirds of the money my husband managed has been exchanged in and out of several stocks, my one third never left Tesla. Many times in the past 12 years my husband tried to convince me to sell Tesla, but it was never time. At one time, he even put some of his money into Tesla shares, however he ended up taking his shares out. I remind him often of how much money we could have today, if he would have left the money in Tesla. I mean what kind of wife would I be if I didn’t?
Women tend to be less emotional about stocks.
Yes, you read that correctly! Women tend to be less emotional when it comes to trading stocks. Women tend to hold (or hodl) stocks longer than men. Since they have usually done more research and believe in the company, they are less likely to react when stocks drop or rise. I do not watch my stocks every day. In fact, when Tesla pumped at the end of last year, it was my husband who texted me to tell me. I still didn’t sell.*** When Tesla is rallying I watch the stock more often, however when it is taking a dive, I turn a blind eye.
Women tend to save more.
When my husband and I were dating, the subject of 401ks came up. At the time, I was investing the max amount into my 401k with an excellent company match and was completely vested. My husband asked me why I put so much into my 401k and I answered, because all of the women in my family lived into their 90’s and I did not want to die poor.
In my early 20’s, I read the book, “Smart Women Finish Rich.” I do not remember all the principles in the book, however it encouraged women to invest and save more than men. Women in general still have a pay gap, we tend to live longer lives than men and we generally take more time off to bear and take care of children.
Women tend to take on less risk.
If I lost all the money I have in stocks and cryptocurrencies today, although it would be painful. It would really suck! It would not however ruin my life. Women are more averse to risk. Women tend to not overextend themselves or feel overconfident in their investments. We also tend to acknowledge when we do not understand everything. I admit my husband knows way more about trading stocks than I do, my forte is crypto.
My husband’s portfolio from the two thirds above has also done very well, but not as well as mine. Did I get lucky? Or did my research, patience and belief in the company pay off?
Crypto Mom Club is all about empowering women to succeed, and there’s no better way than investing in yourself. What are your best women investment stories? Want to learn more about Women and investing? Follow Crypto Mom Club on Medium, Tikok, Twitter, Instagram and Facebook.
***I did recently take a smal profit on my Tesla stocks, because I wanted to put some money into a cryptocurrency I want to hodl for about 3–5 years. Wish me luck!
