As we commemorate International Women’s Day this month, we want to talk about how women play an important role in the world of finance. To do this, we’ve gathered five important points that indicate that women are better prepared to invest than men.
1. Women trade less frequently
Men trade more frequently, perhaps as a strategy of risk aversion. A higher frequency leads to higher trading commissions and fees, which can erode returns and potentially undermine investment strategy. Women are more likely to stay the course long term.
2. Women are inclined to use proven financial strategies
When faced with difficult financial decisions, “to err on rationality” makes it difficult to follow proven financial strategies, resulting in lost opportunities, horizons full of short-term financial decisions, buying high and selling low. Women are more likely to use proven financial strategies and avoid these mistakes.
3. Women achieve higher profitability
According to studies recently published by the website CNNMoney, women achieve higher returns on investment when compared with men and are more disciplined in saving, allowing them to accumulate more capital over time.
4. Women are more thrifty
According to Fidelity, women save an average of 8.3% of income compared with 7.9% of men. This indicates that although the return on investment is the same, women will earn more in their investment portfolios.
5. Women opting for lower risk investments
The study “Catalyst Census” conducted in 2013 found that men are more likely to think of themselves first, assume higher financial risks and are more likely to choose high-risk investments in order to achieve greater profitability; even if, had they stuck to sound financial principles, they would have achieved higher profits. Women continue a steady course and achieve greater profitability.
What differences have you noticed in the way women and men invest? We invite you to participate in our blog.
