Women investors are crushing it financially, proving that women are equipped with the skills needed to be successful investors. More women are taking charge of their finances by creating a financial plan and working towards building wealth. Investing and securing wealth has typically been associated mostly with men.
There's been an irrational assumption that because men dominated the industry of business and finance for so long that it was due to some inherent male trait or behaviors that women simply lacked. It turns out this is false, and there is substantial evidence that the reverse is often true. Here are five reasons why women are excellent investors!
1. Women approach investing with a different mindset
Women approach investing with an entirely different mindset than men. According to BlackRock investment strategist Nelli Oster, women tend to view investing with a longer-term, non-monetary mindset that balances independence, financial security, and quality of life.
He also noticed that women investors take more time in researching their investments. Most importantly, garner advice before committing to investments in their portfolios. This is in stark contrast to men who prefer independent decision making that tends to be more impulsive in response to market trends.
Lastly, Oster notes that women investors utilize professional financial advice more, spend more time with their advisers, and maintain longer relationships with these mentors.
2. Women make fewer emotionally driven investments
Another key differentiator that is usually thrown out as a derogatory, or compromising trait, is the emotional difference between men and women. Denise Shull explores emotionality in her book, Market Mind Games: A Radical Psychology of Investing, Trading, and Risk. In it, she discusses the actuality of investing and trading based on emotions.
Many people are unaware of how panic, fear, and anxiety can influence trades or investment to offset or enhance those emotions. Women are more aware than men that emotions influence perception and are especially more aware of their own emotional state.
And since women are generally more aware of their current emotional state, they are better at refraining from making important decisions during those times. Shull explains that this also leads to women seeking to make investments less for the need to gain control in other areas of their life and more for securing their future.
3. Women invest to win
Another aspect of difference theory that women come out on top of is the need to win. Deborah Tannen, who really put difference theory in the spotlight, says that women see the world as a network of connections while men tend to see the world as a competitive place.
This makes men much more likely to make decisions motivated by the need to beat a competitor. This type of behavior disregards risk; something women are far less likely to do. Women investors focus on the importance of their financial wellness over being competitive.
4. Women investors get professional help
Like asking for directions when needed, women investors are more likely to seek professional help for their investment portfolio than men. Investors that have their portfolios managed by a financial advisor produce better results than those that don't. Having the right financial advisor can be like having an ace in the hole. They help you create an investment strategy that works best for your financial situation and goals. They will also know how to minimize taxes and assist in structuring withdrawals from retirement accounts.
Women are known to read more than men, too, and reading can be beneficial when it comes to learning how to invest. Researching by reading financial books is another way women investors get professional help with their finances.
5. Women save more
According to an analysis by Fidelity Investments, women investors saved a higher percentage of their paycheck than men. Women saved an annual percentage of 9% of their salary while men averaged 8.6% of their pay. Women also saved more towards their retirement accounts outside the workplace. While men only added an average of 11.6% to their outside accounts, women averaged saving 12.4% to their IRA's and brokerage accounts. This may not seem like much, but the return on the savings can be significant over time.
Women investors are securing their financial futures!
The one thing women investors can improve on is their financial confidence! It's apparent that women are amazing investors and can be very successful in reaching their financial goals. Women's ability to invest wisely, save more money towards their retirement, and seek professional help sets them up for a secure financial future.
You can be an amazing investor too! It's all about educating yourself and getting the right financial advice to get you on track towards your money goals. Are you ready to become a successful woman investor? Enroll in our FREE investing course bundle to learn how to grow your money and achieve financial success!