Why Women Are Better Investors?
Hello everyone. Do you know that in accordance to Fidelity's 2021 Women and Investing Study, women’s investment returns outperformed men’s, based on their 5.2 million customer accounts from January 2011 to December 2020. In addition, a survey by ET Money from March, 2021 shows that women investors have generated better returns than men every year from 2017 to 2020.
Thus, faster look around for your female friends who are investors, and they may already generate a huge profit return from their portfolio!
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Let us see why women tend to outperform men in stock market.
Women trade less frequent. Women trade 45% less often than men, and interestingly, this is enough for women’s returns to outperform men. Lesser trading frequency means women is less likely to overtrade. When we overtrade, it will be very difficult to monitor all the positions, and we could be mentally fatigue and make many mistakes. When the trade is less frequent, it also means that women holds the stocks for longer term. Women are also apt to stay calmer than men in down markets.
The statistic also shows that time in the market (stay invested) is more important than timing the market (aim to buy low sell high). If we miss any top day, our return will be affected a lot.
Let us see why men tend to overtrade:
Many men are over-confident. Men tend to read many financial “news” and “hype”, then get sucked in all the hype and emotions of the moment. Men also tend to “show off” their portfolio and return. Thus, traders who are overtrade can go through severe frustration, anger and panic the moment the trader experienced losses and bad calls in the trades. Consequently, they will make more revenge trades to cope the previous loss, which causes even more losses. In addition, overtrade also means we need to pay extra commissions on the investment and results in a poorer investment performance.
How about women?
Interestingly, as women are generally less confident in investing, they tend to spend more time researching their investment choices. This prevents women from chasing ‘hot’ tips and overtrade.
However, the fact is, many women still need to take care the family, housework, take care children or babies and need to do many other stuffs after working hours! They simply do not have enough time to look for news or even log into their trading accounts.
What we can learn from women:
Guys, time to help your mother or wife to do some housework, take care children or babies, or any other tasks to reduce their burden, so your time is occupied to minimize the risk of over-trading!
There are many famous and successful female investors as well. Cathie wood is one of them.
Who is your favourite female investor or trader? Comment below to let us know!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Jay-Jay : women are better investors because they can eaiser take the emotion out of investing.
Casperwolf : it's makes perfect sense to me. I can see it in men, I see it in myself. Being sucked in to media hype, hot tips, etc. I think its very revealing that while women trade much less than men, they still outperform. Interesting article, not surprising at all.
101644863 : totally agree my wife is a better investor than me
JM investor OP 101644863 : me too, lol
JM investor OP Casperwolf : i totally agree with you, i used to be affected by news and hypes a lot until i found my own way to invest by ignoring the news
JM investor OP Jay-Jay : yeah, absolutely agree with you!