WHY WOMEN MAKE FOR BETTER INVESTORS, SORRY GUYS! – February 6, 2023
Some women say, “size matters,” and in this case, I have to agree. In this article, I touch on how women’s investment behaviors compare to men’s. Also, how retired women have a bigger savings account in the end because of how they manage their money differently.
A widespread assumption in investing advice is that women need to be convinced to understand finance and are assumed to be risk-averse spendthrifts. However, research shows that women consistently outperform men in investing, leading to hundreds of thousands more dollars in retirement savings. In addition, women spend more time researching investment choices, take on appropriate levels of risk, and have better age-based asset allocations, which is impressive given women face an income-gender gap and generally make less money.
They are also more likely to hold investments for the long term and remain calm during down markets. Conversely, men trade more often without enough research and reduce their net returns with extra commissions and taxes. They also have the tendency to hold onto trades too long and suffer severe drawdowns and losses. In short, to have more success like women do, investors of any gender should follow a strategy and its rules for buying and selling, exiting losing positions sooner, and reinvesting the money into different assets that are rising.
Reasons Why Women Make for Better Investors
Long-Term Focus: Women tend to prioritize long-term investments and stick with a proven plan, which can lead to more consistent growth.
Prudent Approach: Women tend to have a more conservative approach to investing, which can result in less impulsive or risky investment decisions.
Collaboration and Seeking Advice: Women often have a strong inclination towards seeking help and collaborating with others, which can lead to better decision-making to preserve and grow their capital.
In short, women don’t have it easy, and the investment industry is very male-dominated. Studies show women are more concerned than men about accumulating enough money to retire, running out of money in retirement, maintaining their lifestyle, and poor investment performance. But, because they are more concerned about these things than men are, it’s likely the reason why they do more research, plan their investments, and then invest in their plan. As a result, they tend to avoid getting sucked into hot stocks, commodities, or cryptos as much as men do.
This interesting topic about “size matters” regarding retirement accounts is vital. The financial industry should take into account the specific investment needs of women investors vs. mass market participants with FOMO who think they need to own every shiny object mentioned in the media.
“There is no greater pitfall than the one created by the retail investor industry. They are ripping you off. You are incurring greater risks, lower returns, and higher fees than you realize, and as a result, you are in danger of not achieving your financial goals.”RIC EDELMAN, RANKED BY BARRON’S AS AMERICA’S #1
INDEPENDENT FINANCIAL ADVISOR
I have had some wonderful conversations with savvy ladies from Canada and the USA this week. What I do fits well with how they want to protect and grow their wealth. My main focus is on capital preservation, and because I manage portfolio risk, the profits take care of themselves. As a result, the Consistent Growth Strategy has above-average returns, roughly two times the performance of the old buy-and-hold method, while allowing us to avoid bear markets. This strategy has been hitting new high-water marks every few months since 2007, and why investors in over 130 countries follow my CGS strategy.
One thing they both have in common, though, is that they both tend to use the buy-and-hold strategy. In my recent interview on Kitco news, I talked about why holding investments after the age of 50 could be the most costly financial mistake of their lifetime. Then, David Lin and I dive deep into what everyone must know about investing.
The icing on the cake with what I offer at no additional cost is that anyone who uses an advisor and pays an AUM fee can have the CGS signals autotraded in their self-directed account at no additional cost from what they pay now with an advisor. In fact, most investors save tens of thousands of dollars per year in fees, which is a nice big bonus.
Regardless of which type of trader/investor you are, if you can no longer take the pain of losing money trying to trade, and can’t afford to ride out another bear market and risk your lifestyle and retirement account, then following one of my simple and proven strategies could be just what you need.
Author: Chris Vermeulen