Numerous studies have indicated that women's portfolios
outperform their male counterparts due to the innate attributes that women have
by nature that mark them from male investors in their investment approach.
Women are more risk-averse, prepared to admit and research what they don't
know, and their investment strategy is summed up by the phrase "slow and
steady wins the race."
Women also have a longer investment horizon than men, so they
trade less frequently. Today, it's critical that we break free from this old
school of thought and strive to comprehend the value of investing more deeply
from the perspective of a woman.
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"We're not wired the same way. Women are more active in
planning and self-control than men. Kathy Donnelly, a proprietary trader and
co-author of "The Lifecycle Trade," says, "I think that people
tend to be better traders."
Donnelly cites a 2017 Fidelity Investments study that found that
women get 40 basis points or 0.4 percent, better returns than males when
investing, and that women save more. These little variances pile up over time,
according to Fidelity.
According to a different study conducted in the United Kingdom,
men outperform the country's benchmark FTSE 100 (FTSE) index by 0.14 percent,
while women outperform it by 1.94 percent, a difference of 1.8 percentage
points. The survey, which was performed with the help of Barclays, discovered
that males trade more frequently than women – 13 times each year vs nine times
during the same period.
Men were more likely to take profits on successful transactions
while holding onto losers, according to the Warwick study, implying that female
investors avoid "lottery-type" speculating. Men are more prone to
invest in lower-cost stocks that help to explain the modern meme stock
phenomenon. Many of the stocks targeted, such as GameStop (GME) and AMC
Entertainment (AMC), are penny stocks (or at least they used to be when they
traded at lower prices).
According to a Nasdaq report: "Women, on the whole, are
more patient and allow their assets to mature. This is critical since trading
and acting on short-term swings typically leads to bad outcomes. Men may learn
a thing or two from women in this area."
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Alissa Coram, the multimedia content editor, says when asked
about her experience as a female investor, "I believe that the market is
unconcerned by how I look, where I'm from, or my age. I see it as being
optimistic...there are endless chances out there, as long as you have a good
set of rules and techniques to follow when investing and making sure you don't
blow your account up. I believe that there is a chance for everyone and that
girls should seize it without allowing misconceptions about Wall Street or the
financial sector to hold them back."
Men have always controlled stock trading, however, there are
indications that cryptocurrencies are assisting to break that stranglehold.
Robinhood announced recently that the number of women crypto traders among its
clients has increased sevenfold on in the year, with 40% of its active female
consumers trading in crypto assets such as bitcoin (BTC-USD), ethereum
(ETH-USD), and dogecoin (DOGE-USD) (DOGE-USD). "These data are promising,
and they demonstrate that Cryptocurrency may be a potent instrument for
decentralizing power in banking," Robinhood said.
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