Why Women are More Savvy Investors than Men

Why Women are More Savvy Investors than Men

March 06, 2024

While women are sometimes considered to be more reluctant to invest than their male counterparts, when they do invest, they tend to outperform males and often get a greater overall return. Interestingly, this initial perceived reluctance often works in the women investor’s favor. Read on to learn a few of the reasons women are considered more savvy investors.

1. Women Buy and Sell Stock Less Frequently Than Men

One reason that women may experience better returns than their male counterparts is the fact that they move their money around less often than men. By being more conservative with their trading frequency, they follow the traditional "buy and hold" strategy, which is generally more effective at getting long-term returns.

2. Women More Often Seek Out and Take Investing Advice

Women tend to be more trusting and open to collaboration than men. If they are unsure of an investment or strategy, they will seek advice instead of being overconfident and jumping right in. Women prefer to make more informed and calculated decisions when it comes to investing, which causes them to seek professional advice and perform more detailed research before making their investment decisions.

3. Women Focus More on Portfolio Balance

A good mix in your investment portfolio is necessary to work toward long-term financial goals. Since women are more cautious and risk-averse when investing, they often have a more balanced portfolio than men. Their portfolios often combine a balance of cash, bonds, and stocks with balanced risk and reward potential. Men will more often have stock-heavy portfolios that are more subject to volatility.

4. Women Will Stick to Their Original Plan

Women are more likely to keep emotion out of investing. They will work with a financial professional or other trusted advisor and develop a well-thought-out investment plan. They are also more likely to stick with their original plan than men. Women tend to be calmer than men through market volatility and will trust in their original plan instead of feeling the need to move around money.

5. Women Are More Curious, Which Helps Them With Investment Strategies

Women want to learn more about the ins and outs of investing and various investment strategies. By taking the time to learn how various investments work and what the potential risks and returns are for them, they are more able to make confident and well-informed decisions.

Whether it is due to a greater curiosity about investing, a more cautious approach, or their trust in their financial professional, women are solid investors who may seek to increase their wealth by stepping out of their comfort zone and becoming more comfortable investing.



Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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Footnotes:

1 “Why Women Are Better (Investors) Than Men,” Forbes, https://www.forbes.com/sites/timmaurer/2023/04/30/why-women-are-better-investors-than-men/

2 “Here’s why women are better investors than men,” CNBC, https://www.cnbc.com/2022/04/11/op-ed-heres-why-women-are-better-investors-than-men.html

Sources

https://www.forbes.com/sites/timmaurer/2023/04/30/why-women-are-better-investors-than-menhttps://www.cnbc.com/2022/04/11/op-ed-heres-why-women-are-better-investors-than-men.html

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