Who Makes the Better Investor? Men or Women?
Through almost 24 years in working with people I have found that there are subtle nuances between how men and women invest money. There is not a dominate trait that you are going to see consistently amongst men or woman.
Kiplinger Magazine just released an article found in their latest edition titled The Secrets of Woman Investors. It talks about what differentiates women from men when it comes to investing. Here are the characteristics: (for more detail go to the article)
- Investment in What You know
- Temper Risk (balance risk- women do this better)
- Think Long-term
- Trade Sparingly (women definitely do this better than men)
- Sell with Discipline (always have a sell strategy)
- Rehearse Your Script (understand how markets move and keep your emotions in check – Women do this better as well)
- Work with a Team (Women are more likely to work with advisors)
Do Men have any strengths?
According to the article, Men are more aggressive when it comes to saving both in and outside of retirement accounts. The article states that men are better at tracking their progress. Actually, I think that people in general fail at tracking and planning. The article also states that there is an investment knowledge advantage when it comes to men.
Unfortunately, the paragraphs about men’s strengths were quite small.
So who is the better investor?
In tons of surveys there is no clear dominate winner. The one advantage that women might have over men is balance. Women have a better balance for investing and taking risk while Men are more likely to take maximum risk. That doesn’t always work out so well. Realistically, the answer comes down to the individual who practices the traits stated above. Was that a politically correct way to answer that question? 🙂
Bob Brooks is host of The Prudent Money Radio Show, Financial Advisor, and active money manager that consults and helps people plan.