Why Women Make Better Traders and Investors Than Men
I am often asked whether men or women make better stock market traders and investors. My answer has always been women, and I have now been proved right. A recent study by Digital Look, who analysed 100,000 portfolios, revealed that ordinary women investors, living all over the country and dealing in shares via the internet, telephone or investment clubs are consistently doing better than highly paid professionals in the city. During the period of the study the average female portfolio rose by 10% compared to just a 4% rise for the overall FTSE index and a 6% increase for that of the average man.
Apart from being proved right, what is even more encouraging is that both the men and women outperformed the money men of the city. If it is therefore possible for these ordinary investors to outperform the so called professionals, why don’t more people handle their own investments? I have no doubt there are many reasons including, a lack of both time and knowledge, but I personally believe the main reason to be fear. The world of finance can seem intimidating and complex and it is an impression those on the inside do little to dispel. However, what they sometimes forget is that without the contribution of those on the “outside” this world would not exist at all. The money fuelling this industry comes from the everyday activities of ordinary men and women and from the mundane markets such as savings and pensions.
For women it is even more important that they overcome this fear as within the next generation they are forecast to own over 60% of all personal assets, the first time this has ever happened. More women are starting businesses and soon there are going to be more women millionaires than men. Many companies have recognised this trend and have been quick to develop specialist services, yet the financial industry seems extremely resistant to this trend, with only a handful making half hearted attempts. In general they only pay lip service to this huge and growing market.
Women make better traders and investors for many reasons. Firstly, and most importantly, women are prepared to listen, admit any mistakes and learn from them. Men, on the other hand, will blame the market or their advisers, rather than their own judgment and will stick doggedly to a view even when the facts are obvious that they are in fact wrong. Getting a man to admit an error of judgement or that they have made a mistake is very rare. In the trading world this can be a costly personality trait, and yet it is a common one in men. Ask most men the reason for this and they will answer that admitting a mistake is a sign of weakness. As all women know, it is in fact the reverse. A classic behaviour is in map reading. All men think they are natural navigators and will refuse the offer of help even when completely lost, preferring to carry on until they find some recognisable landmark. This is generally miles from where they wanted to be yet this small success will be offered in vindication of the major detour that has resulted. Women will stop and ask as soon as they are lost. In the trading world this is a major strength. Accepting a loss and moving on is one of the key characteristics that defines a good trader from one who will be wiped out very quickly.
Women are happy to learn, men are not. Give the same piece of technical equipment to a man and women and observe the different approaches. The man will not read the manual, but attempt to use the equipment straight from the box. Invariably this fails, but reading the manual is a last resort for the male, who ploughs on regardless until finally admitting defeat and is forced to grudgingly read the instructions. The woman on the other hand will probably read the manual first before attempting to use the equipment. If both are doing it together then conflict ensues!
Finally women make better traders as ironically they are more able to remove emotion from the trades. Men will become irate and take it as a personal insult when trades go wrong, whilst women are more philosophical about the loss and take a more dispassionate view. Being able to trade without emotion is one of the keys to success in the financial markets – just ask any successfully trader – this is a business and not personal.
Apart from being proved right, what is even more encouraging is that both the men and women outperformed the money men of the city. If it is therefore possible for these ordinary investors to outperform the so called professionals, why don’t more people handle their own investments? I have no doubt there are many reasons including, a lack of both time and knowledge, but I personally believe the main reason to be fear. The world of finance can seem intimidating and complex and it is an impression those on the inside do little to dispel. However, what they sometimes forget is that without the contribution of those on the “outside” this world would not exist at all. The money fuelling this industry comes from the everyday activities of ordinary men and women and from the mundane markets such as savings and pensions.
For women it is even more important that they overcome this fear as within the next generation they are forecast to own over 60% of all personal assets, the first time this has ever happened. More women are starting businesses and soon there are going to be more women millionaires than men. Many companies have recognised this trend and have been quick to develop specialist services, yet the financial industry seems extremely resistant to this trend, with only a handful making half hearted attempts. In general they only pay lip service to this huge and growing market.
Women make better traders and investors for many reasons. Firstly, and most importantly, women are prepared to listen, admit any mistakes and learn from them. Men, on the other hand, will blame the market or their advisers, rather than their own judgment and will stick doggedly to a view even when the facts are obvious that they are in fact wrong. Getting a man to admit an error of judgement or that they have made a mistake is very rare. In the trading world this can be a costly personality trait, and yet it is a common one in men. Ask most men the reason for this and they will answer that admitting a mistake is a sign of weakness. As all women know, it is in fact the reverse. A classic behaviour is in map reading. All men think they are natural navigators and will refuse the offer of help even when completely lost, preferring to carry on until they find some recognisable landmark. This is generally miles from where they wanted to be yet this small success will be offered in vindication of the major detour that has resulted. Women will stop and ask as soon as they are lost. In the trading world this is a major strength. Accepting a loss and moving on is one of the key characteristics that defines a good trader from one who will be wiped out very quickly.
Women are happy to learn, men are not. Give the same piece of technical equipment to a man and women and observe the different approaches. The man will not read the manual, but attempt to use the equipment straight from the box. Invariably this fails, but reading the manual is a last resort for the male, who ploughs on regardless until finally admitting defeat and is forced to grudgingly read the instructions. The woman on the other hand will probably read the manual first before attempting to use the equipment. If both are doing it together then conflict ensues!
Finally women make better traders as ironically they are more able to remove emotion from the trades. Men will become irate and take it as a personal insult when trades go wrong, whilst women are more philosophical about the loss and take a more dispassionate view. Being able to trade without emotion is one of the keys to success in the financial markets – just ask any successfully trader – this is a business and not personal.
I am often asked whether men or women make better stock market traders and investors. My answer has always been women, and I have now been proved right. A recent study by Digital Look, who analysed 100,000 portfolios, revealed that ordinary women investors, living all over the country and dealing in shares via the internet, telephone or investment clubs are consistently doing better than highly paid professionals in the city. During the period of the study the average female portfolio rose by 10% compared to just a 4% rise for the overall FTSE index and a 6% increase for that of the average man.
Apart from being proved right, what is even more encouraging is that both the men and women outperformed the money men of the city. If it is therefore possible for these ordinary investors to outperform the so called professionals, why don’t more people handle their own investments? I have no doubt there are many reasons including, a lack of both time and knowledge, but I personally believe the main reason to be fear. The world of finance can seem intimidating and complex and it is an impression those on the inside do little to dispel. However, what they sometimes forget is that without the contribution of those on the “outside” this world would not exist at all. The money fuelling this industry comes from the everyday activities of ordinary men and women and from the mundane markets such as savings and pensions.
For women it is even more important that they overcome this fear as within the next generation they are forecast to own over 60% of all personal assets, the first time this has ever happened. More women are starting businesses and soon there are going to be more women millionaires than men. Many companies have recognised this trend and have been quick to develop specialist services, yet the financial industry seems extremely resistant to this trend, with only a handful making half hearted attempts. In general they only pay lip service to this huge and growing market.
Women make better traders and investors for many reasons. Firstly, and most importantly, women are prepared to listen, admit any mistakes and learn from them. Men, on the other hand, will blame the market or their advisers, rather than their own judgment and will stick doggedly to a view even when the facts are obvious that they are in fact wrong. Getting a man to admit an error of judgement or that they have made a mistake is very rare. In the trading world this can be a costly personality trait, and yet it is a common one in men. Ask most men the reason for this and they will answer that admitting a mistake is a sign of weakness. As all women know, it is in fact the reverse. A classic behaviour is in map reading. All men think they are natural navigators and will refuse the offer of help even when completely lost, preferring to carry on until they find some recognisable landmark. This is generally miles from where they wanted to be yet this small success will be offered in vindication of the major detour that has resulted. Women will stop and ask as soon as they are lost. In the trading world this is a major strength. Accepting a loss and moving on is one of the key characteristics that defines a good trader from one who will be wiped out very quickly.
Women are happy to learn, men are not. Give the same piece of technical equipment to a man and women and observe the different approaches. The man will not read the manual, but attempt to use the equipment straight from the box. Invariably this fails, but reading the manual is a last resort for the male, who ploughs on regardless until finally admitting defeat and is forced to grudgingly read the instructions. The woman on the other hand will probably read the manual first before attempting to use the equipment. If both are doing it together then conflict ensues!
Finally women make better traders as ironically they are more able to remove emotion from the trades. Men will become irate and take it as a personal insult when trades go wrong, whilst women are more philosophical about the loss and take a more dispassionate view. Being able to trade without emotion is one of the keys to success in the financial markets – just ask any successfully trader – this is a business and not personal.
Apart from being proved right, what is even more encouraging is that both the men and women outperformed the money men of the city. If it is therefore possible for these ordinary investors to outperform the so called professionals, why don’t more people handle their own investments? I have no doubt there are many reasons including, a lack of both time and knowledge, but I personally believe the main reason to be fear. The world of finance can seem intimidating and complex and it is an impression those on the inside do little to dispel. However, what they sometimes forget is that without the contribution of those on the “outside” this world would not exist at all. The money fuelling this industry comes from the everyday activities of ordinary men and women and from the mundane markets such as savings and pensions.
For women it is even more important that they overcome this fear as within the next generation they are forecast to own over 60% of all personal assets, the first time this has ever happened. More women are starting businesses and soon there are going to be more women millionaires than men. Many companies have recognised this trend and have been quick to develop specialist services, yet the financial industry seems extremely resistant to this trend, with only a handful making half hearted attempts. In general they only pay lip service to this huge and growing market.
Women make better traders and investors for many reasons. Firstly, and most importantly, women are prepared to listen, admit any mistakes and learn from them. Men, on the other hand, will blame the market or their advisers, rather than their own judgment and will stick doggedly to a view even when the facts are obvious that they are in fact wrong. Getting a man to admit an error of judgement or that they have made a mistake is very rare. In the trading world this can be a costly personality trait, and yet it is a common one in men. Ask most men the reason for this and they will answer that admitting a mistake is a sign of weakness. As all women know, it is in fact the reverse. A classic behaviour is in map reading. All men think they are natural navigators and will refuse the offer of help even when completely lost, preferring to carry on until they find some recognisable landmark. This is generally miles from where they wanted to be yet this small success will be offered in vindication of the major detour that has resulted. Women will stop and ask as soon as they are lost. In the trading world this is a major strength. Accepting a loss and moving on is one of the key characteristics that defines a good trader from one who will be wiped out very quickly.
Women are happy to learn, men are not. Give the same piece of technical equipment to a man and women and observe the different approaches. The man will not read the manual, but attempt to use the equipment straight from the box. Invariably this fails, but reading the manual is a last resort for the male, who ploughs on regardless until finally admitting defeat and is forced to grudgingly read the instructions. The woman on the other hand will probably read the manual first before attempting to use the equipment. If both are doing it together then conflict ensues!
Finally women make better traders as ironically they are more able to remove emotion from the trades. Men will become irate and take it as a personal insult when trades go wrong, whilst women are more philosophical about the loss and take a more dispassionate view. Being able to trade without emotion is one of the keys to success in the financial markets – just ask any successfully trader – this is a business and not personal.
posted by zzzzzzzzzzz at
2:36 AM
<< Home