Why are women better investors than men?
Oct 13, 2021
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Is only one area in which women have surpassed men in terms of earnings: the investment. In other areas, women are significantly inferior to men in the size of salaries and the rapidity of career growth.In this article we will talk about the "female approach" to investing and increasing money. And also why women's investment portfolios have better financial results over the long haul.
According to experts of the Optimist.pw blog about self-development, there are three reasons for the investment "genius" of women (this is why women are better investors than men):
1. Women do not compete with each other "who has more"
This is the sole prerogative of men - constantly measure their "guts" and the size of profits earned on investments.
Alas, this is how nature has created them and programmed them over thousands of years of evolution, because the female mates with the best of the species (the others have very little chance of reproduction):
- High testosterone levels push men to perform feats and take excessive risks;
- Some deals "shoot out", but most investments do not tolerate high risk and punish investors for it;
- As a result, unreasonable risk sooner or later leads to the loss of all invested money.
A woman's approach to investing is different. They don't turn investing into a game of chance and accept only weighted risk. There is no point in competing with other investors (and bragging) about the size of the income. And, in general: "investing should be boring" - this is the opinion of the richest investor in the world Warren Buffet.
2. Women are less likely to trade in the stock market
Cal-Berkeley analyzed 35,000 households and found a very revealing fact:
Men trade 45 percent more often than women.
In other words, men tend to make frequent speculative trades in the stock market, while women prefer a long-term "buy and hold" strategy.
What is the point of such a strategy? Shares may not go up, after all? The fact is that the stock market is arranged in a very paradoxical way: "the less often you trade, the higher your profits". And over the long term, most stocks go up. That is why women quite naturally manage to "outperform" men.
A woman's approach to investing is quite simple: it is a complete rejection of speculation and regular monthly putting money into the market. The goal is to make long-term investments in the "buy-and-hold" style.
3. Women don't confuse random luck with their investment abilities
Risk comes from not knowing what you're doing.
Men, because of their natural self-confidence, tend to explain their victories in the stock market solely by the fact of their ingenious foresight. Although anyone with even a slightest knowledge of economics clearly understands that the future is completely unpredictable.
That is why any "fast" income on the stock market is formed only as a consequence of favorable circumstances (i.e., solely due to blind luck).
Women, on the contrary, are excessively cautious in investments. This protects capital from most potential risks. And as experience shows: it has an effect. Slow and persistent investing defeats speculators who are constantly tossing from side to side.
Tags: English