TomorrowMakers

This is how women are successfully changing the mindset when it comes to investing.

5 Factors that make women smarter and better investors

It may come as a surprise to many that women tend to make better investors than men. Most of us look at women as having little or no interest in finances – despite the fact that they manage household budgets with ease. So why can’t they become successful investors?

Women have come a long way. Like men, they have adapted to the professional world and are now capable of handling personal finances and investing their own money. Since they have traditionally managed family expenses, extending their participation in family investments can only bring added value and a fresh perspective. 

According to Fidelity Investments, women are actually superior investors. Studying more than 8 million investment accounts, Fidelity discovered that women not only make 40 basis points higher returns than men, but also save 40 basis points more than men annually.

So what equips women to manage their personal finances and earn stronger returns on their investments? Let’s look at some factors that make women smarter and better investors:

1. Women think holistically – When it comes to investment, women focus on an all-inclusive financial plan. Whether from basic instinct or social conditioning, their life goals include their families as well. Since women are traditionally more knowledgeable of the family’s affairs, this experience makes their investment approach more personalised and tailor-made for the benefit of the whole family.

2. Women are more balanced – Women don’t focus on performance alone. They tend to take a more long-term view of investment. They avoid 100% equity, which can expose funds to serious market risks, and instead look for a balanced portfolio that guarantees long-term returns. Rather than be impulsive as men are prone to, women tend to be more patient. Their preferred approach is to seek investments that give stable returns. 

3. Women are more methodical – Women spend more time for due diligence, such as doing research on financial tools. So when it comes to financial investment, women rely less on hunches and focus more on facts and proof of investment. They are more likely to block out ‘market noise’ and be disciplined savers. They also have a long-term commitment to pursue their financial goals.

4. Women are conservative –Women are by nature cautious spenders, and believe in budgeting. They allocate money for various monthly expenses – food, clothing, kids’ education, and so on. This instinct helps them to be good financial managers, and they are more likely to allocate savings in safer modes of investment. They are also more likely to invest in diversified funds, to make a more balanced portfolio. 

5. Women have the right attitude –When it comes to investment, patience is often the key to sound and safe returns. Women tend to focus on achieving their life goals through steady investment and do not chase only high-performing stocks. They are resilient and don’t let minor setbacks discourage them. This way, their investments tend to be more fine-tuned and grounded to meet their financial goals. 

Last words 

It is common for men to make rash decisions in investments, or get swayed by the financial noise in the market. This often results in wrong or impulsive financial decisions, which may result in losses. Since women are new to the investment business and have a family-before-self attitude, it imparts more stability and balance while taking financial decisions. 

What’s most important is the financial empowerment of women in the family. Men should not only share financial responsibilities with their spouses but also learn from their inherent qualities and gender abilities. Men should learn to be more family-oriented and not chase the prospect of sudden wealth. They will soon realise that patience pays.

It may come as a surprise to many that women tend to make better investors than men. Most of us look at women as having little or no interest in finances – despite the fact that they manage household budgets with ease. So why can’t they become successful investors?

Women have come a long way. Like men, they have adapted to the professional world and are now capable of handling personal finances and investing their own money. Since they have traditionally managed family expenses, extending their participation in family investments can only bring added value and a fresh perspective. 

According to Fidelity Investments, women are actually superior investors. Studying more than 8 million investment accounts, Fidelity discovered that women not only make 40 basis points higher returns than men, but also save 40 basis points more than men annually.

So what equips women to manage their personal finances and earn stronger returns on their investments? Let’s look at some factors that make women smarter and better investors:

1. Women think holistically – When it comes to investment, women focus on an all-inclusive financial plan. Whether from basic instinct or social conditioning, their life goals include their families as well. Since women are traditionally more knowledgeable of the family’s affairs, this experience makes their investment approach more personalised and tailor-made for the benefit of the whole family.

2. Women are more balanced – Women don’t focus on performance alone. They tend to take a more long-term view of investment. They avoid 100% equity, which can expose funds to serious market risks, and instead look for a balanced portfolio that guarantees long-term returns. Rather than be impulsive as men are prone to, women tend to be more patient. Their preferred approach is to seek investments that give stable returns. 

3. Women are more methodical – Women spend more time for due diligence, such as doing research on financial tools. So when it comes to financial investment, women rely less on hunches and focus more on facts and proof of investment. They are more likely to block out ‘market noise’ and be disciplined savers. They also have a long-term commitment to pursue their financial goals.

4. Women are conservative –Women are by nature cautious spenders, and believe in budgeting. They allocate money for various monthly expenses – food, clothing, kids’ education, and so on. This instinct helps them to be good financial managers, and they are more likely to allocate savings in safer modes of investment. They are also more likely to invest in diversified funds, to make a more balanced portfolio. 

5. Women have the right attitude –When it comes to investment, patience is often the key to sound and safe returns. Women tend to focus on achieving their life goals through steady investment and do not chase only high-performing stocks. They are resilient and don’t let minor setbacks discourage them. This way, their investments tend to be more fine-tuned and grounded to meet their financial goals. 

Last words 

It is common for men to make rash decisions in investments, or get swayed by the financial noise in the market. This often results in wrong or impulsive financial decisions, which may result in losses. Since women are new to the investment business and have a family-before-self attitude, it imparts more stability and balance while taking financial decisions. 

What’s most important is the financial empowerment of women in the family. Men should not only share financial responsibilities with their spouses but also learn from their inherent qualities and gender abilities. Men should learn to be more family-oriented and not chase the prospect of sudden wealth. They will soon realise that patience pays.