Women the better investors?

[ENT Doc]

A recent Fidelity study seems to think so:

https://www.fidelity.com/about-fidelity/individual-investing/better-investor-men-or-women

Curious what underlies these disparities.  Women, care to share your secrets of success?  :-)

[RogueDadMD]

I'm not a woman, but best guess is the same reason they pay less for life insurance.  They are less likely than men to do stupid things (like ride motorcycles without helmets or try to time the market).

[LizOB]

Probably something really boring like buy and hold index funds. I think that's what most on this site do anyways, but I could totally see how men on average would try more stock-picking, actively managed funds, and market timing than women

[ENT Doc]

LizOB wrote:

Probably something really boring like buy and hold index funds. I think that’s what most on this site do anyways, but I could totally see how men on average would try more stock-picking, actively managed funds, and market timing than women

Click to expand...

I heard a Stacking Benjamin's podcast on this study, and the woman they interviewed from Fidelity cited many of the examples you gave with respect to superior returns.  The reason behind the savings rate difference (given the same income) were not specifically analyzed.  Wondering if guys just naturally want to thrust out their chest, show their wealth, buy fancy toys, etc.  It would be interesting if an investor policy statement would help to normalize the savings rate.

[jfoxcpacfp]

This from a recent study I just read (and which I can bear witness to):

• Women tend to be more interested in how well off they will be, if they will run out of money, if they are making good spending and saving decisions.


• Men tend to be more interested in getting the highest returns possible, cutting to the chase, I guess you could say, rather than starting with a plan.

This is just a generalization, of course. We work with plenty of male clients who understand the first priority is to have a plan. I think WCI sets a good example. (However, at the moment, I can't think of any female clients whose initial goal is "getting good returns".) I believe the two perspectives, when applicable, are indicative of the varying results.

[notadoc]

The Secrets of Women Investors

"A raft of surveys indicate that women do more research, are better at matching their investments to their goals, trade less and remain calmer during market upheavals."

http://www.kiplinger.com/article/investing/T031-C000-S002-the-secrets-of-women-investors.html

[PhotonsRGR8]

I think it's really an individual thing. Some people just have a real interest in financial markets. I read the WSJ (and FT/IBD when I could get my hands on one)  as a kid. I read Security Analysis as a 20-something to take breaks from studying. I opened an online brokerage in 1995 when I first started in pvt practice and would buy a 1000 of MSFT or JBIL etc. on margin and sell it a few days later after it went up a buck or two for fun between patients. For my retirement account I opened a Vanguard acct to fund my SEP and sent in paper checks monthly basically buying SP500. I had opened Trad IRAs for my husband and myself when we were still interns again mainly SP500. I didn't trust International/ Emerging yet. My spouse and I are fairly frugal so I quickly opened an additional after tax account at Vanguard again 1995 to put excess after tax funds. In 1996, in my fun money brokerage acct, I started buying big chunks (1000 shares) of stocks where I understood the stock. The PE ratio was reasonable. The payout was x < 60%. The dividend yield when I purchased was north of 5% etc. I was largely shielded from the dot.com bust because I didn't buy the NASDAQ (I just jumped in and out ie. MSFT JBIL)

My portfolios did dip a little in 2000? but quickly recovered. I opened a Fidelity brokerage around 2001 because at the time Vanguard either didn't have brokerage accounts for individual stock or it was too clunky to use. I can't recall. Since I started dividend investing in 1996, I've always kept a list of medium/large/mega blue chip multinationals with long history of dividends and a price point where I wanted to jump in. They've got automated watch lists now that ping your phone when your preset trigger hits. Luckily I had a lot of cash sitting in a MM at Fidelity since I stopped buying around early 2007. Just about everything was too expensive like it is now.I was positioned well when 2008 hit. Yes, my portfolio was kneecapped in 2008/2009 but I reminded myself I had the same number of shares. I bought steadily from October 2008 through February 2009. I resumed buying in June 2009. I got a few issues for ridiculously low prices MCD/DOW/PM (pre-split PM/MO/KFT?) A lot of shares I had suspended dividends but then restored. This way of investing is incredibly tax inefficient but it's a hobby that I enjoy.WRT bonds, I've only got a handful of individual issues which I researched and I'm liking preferred shares but takes more digging. I have zero experience with options and currency trading. Yes I've made some 6 figure mistakes. Selling shares of BRKA at break even(no dividend) to free up cash for some RE then watching it double. Does anyone here trade options/currency? Apologies for length of post. Won't be offended if it's TLDR.

[djohnflatfeecfp]

This is a consistent theme in multiple studies.  I think RogueDad hit it on the head - they do fewer stupid things.  Some of those stupid things include chasing returns, trading too much, and thinking high fees correlate to better performance. Other key factors are women tend to take a longer term focus with their investments and they will take more time to make their financial decisions (I assume this decreases the odds of a stupid decision).  This is also consistent with female-led vs. male-led hedge funds.  Ones run by women do better.  The problem is not enough hedge funds are run by women.