Between 2012 - 2016, Warwick Business School conducted a study of almost 2,500 investors, 450 of which were women. As a whole, female study member outperformed the males by 1.2% per year. Not bad.
Closer to home, a 2017 study out of UNSW that was 17 years in the making produced similar results.
Let's take a closer look at some of the reasons women are such strong investors:
Women stick to the (long-term) plan
By this, we mean that women give their investments a chance to grow, trading less frequently than men. The positive impact of a longer-term play to support financial goals is two-fold:
- Your investment has time to mature and increase its return.
- You're spending less time putting yourself in the position of dealing with hefty losses as a result of making bad trades.
Women tend to have a more risk-averse mindset
Some common trading behaviours include holding onto loss in the hope your investment will come good or, choosing a riskier investment option because the temptation to make money quickly is high. And both of these behaviours are seen more frequently in men than women.
Some research shows that women are more likely to cut their losses sooner and they show more scepticism when it comes to investing in 'pumped up' stocks. The same research says they're likely to remain calmer in volatile situations and will ride out the storm and show conviction in their strategy rather than having a knee-jerk "abandon ship" reaction.
Women shop around
This is NOT about stereotyping but more about women doing their homework and digging in when they're in the research phase of their investment strategy. Women also appear more likely to ask for help and actively seek out tips, know-how, advice and guidance when deciding where and how much to invest.
The result is less frequent but substantially larger investments (that they'll leave alone to grow and mature!) indicating that informed decisions lead to a higher confidence when it comes to decision making.
Investing like a (lady) boss: what are the options?
Longer-term investments are proving to be the steadiest and most surefire way to grow wealth – so make sure you’re willing to wait for it!
- Whether it’s investing in shares, stocks, bonds or ETFs, it’s crucial you do your research or speak to a trusted person to guide you on investments that will pay off down the track.
- Property investment is also a contender in the long-term investment game, and one that many of us, women and men, will set out to achieve in our lives.
Property investment: when’s the right time to get started?
While the gender gap is closing, the reality is that women still face obstacles like lower income and less superannuation when it comes to building wealth. Thinking of alternative strategies is important to consider early on as a way to help future-proof your retirement.
Whether it’s investing on your own or with a trusted pal or sibling, by doing your research and understanding the requirements of being a property investor, you can gain the confidence you need to invest with conviction.
Choosing the right home loan is also a critical piece of the puzzle. We offer super competitive investor home loans for anyone ready to get started on building their wealth.