When it comes to women investors, it’s not a matter of being better than men or vice versa, the truth is there’s are tactical strengths seen in both genders that we each could learn from.
Studies often suggest that women tend to be better long-term investors because they are more goal-focused, and that they also tend to do more research and trade less often, whereas men have greater confidence and are more willing to take risks that may produce bigger returns.
But first, celebrity cook and author Maggie Beer on her money regrets, thanks to The Investment Series by investing education business No More Practice.
So what are some of those key traits to being a great investor?
Female investor traits
* Take a long-term view when it comes to investing.
* Trade less often.
* Ignore ups and downs of markets.
* Do more research and have that support your investment decision.
Male investor traits
* Greater confidence in taking investment actions.
* More willing to take risk, and bigger risks at that.
* Trade more often.
* More willing to jump in.
According to legendary investor Warren Buffett, it’s temperament not intellect that creates a good long-term investor.
In the book titled, Warren Buffett Invests Like a Girl: And Why You Should, Too, author LouAnn Lofton suggests that many successful investor traits come naturally to women.
Catherine Robson principal of Affinity Private agrees.
“There is a body of research that suggests women are more likely to be slower to invest, they do more research, they limit their investments and once they make investments will hold those assets for longer and are less likely to suffer confidence issues. They are also more likely to ride the ups and downs and are less likely to try and control the outcomes.
“These are all of the characteristics that Warren Buffett is renowned for and he’s said in the past that he’d be happy for the share market to close today and not open for another ten years because he’s done his research.”
But Catherine adds that where women tend to struggle as investors is getting started, and this is where men do it better.
“It takes women a lot more to get over that pain threshold to get started. Men are more comfortable with taking a risk and what they learn from is trial and error, and I think there is no greater lesson than learning from experience.
“If women are getting started later and are slower to activate they have a smaller pool experience to draw on,” says Robson.
Studies by various financial firms also support these findings.
In a 2013 study by Fidelity, women in committed relationships were found to be significantly less willing than men to take risk, even if there was the potential to achieve substantial gains.
A US-based survey reported in the Wall Street Journal by BlackRock found that women have more of their investment portfolio invested in cash.
Research by Bank of America Merrill Lynch also found that more than half the women questioned in a survey feared losing money, and more than a third expressed concern about not having access to cash when they need it.