Are Women better investors?

What is your definition of having a good time in your 20s? I’d say it is to start investing in your 20s, the earlier you start, the better. The saying goes that the best time to start investing was yesterday. The second-best time is today.

But, Myth: “Women aren’t good investors”
Fact: Women have self-doubt (yes, I said it). But when we do invest, we’re very good at it.

And I have research to prove it. Various reports consistently confirm that women outperform men by a considerable margin when it comes to investing. Women’s investment returns were 0.4% higher than men’s, on average. There are a few reasons women tend to broadly outperform men, first is that they trade less, allowing them to ride out market lows and avoid extra fees. They also tend to invest more consistently, which means they aren’t trying to time the market. And they know how to keep their emotions in check.

This brings me to the main point which is, more women need to invest. But how do you go about it?

Start now
The earlier you invest, the more wealth you can accumulate. That’s because compound interest allows you to earn interest on your interest. Understand the importance of compound interest and the time value of money.

Make contributions automatic
You don’t need a ton of money to start investing, but you do want to regularly contribute to your account. Automating your investments will ensure you not only keep building your balances but that you are investing no matter what the stock market is doing. You can easily do this using the emandate feature.

How can you contribute to encouraging women to invest?

You can start by gifting stocks/ETFs to encourage more women to start investing.

So start investing with your friends. And get the convo going. What’s your favorite ETF/stock? How have you been successful in saving?

Do you think women are better at investing?

  • YES
  • NO

0 voters

23 Likes

Very well written post on a thought provoking topic @Shruthi

As you have rightly mentioned, This self-doubt is the biggest impediment in the beginning at the same time if conquered, it becomes the biggest asset for the women investors as they are extremely good at keeping their emotions in check and that is a single most important factor in risk and trade management. Women are extremely prudent by nature. I have seen my mother, grand mothers, aunts ,sisters and they all exhibit this brilliant trait.

Women are truly the masters at making the best out of the available resources (be it at office, home , anywhere) and that is what I believe the game changer for women in their investing journey :slight_smile:

6 Likes

Yes, I completely agree with everything said above. I used to have a misconception about investing in the stock market (I used to think, the stock market is a very risky thing to get into, and I should keep my money out of it), but since I started investing, I’ve learned and understood how we can consistently invest small amount and watch it grow. I feel it is important for women to concentrate on financial planning in order to achieve their long-term objectives and ambitions.

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I think women are better than men at almost everything which doesn’t involve physical work. :grimacing:
What women lack as you righty said is self-doubt and confidence which is maybe due to societal pressures. Historically there were not even enough opportunities for women. But I think this is all changing and very fast. There are so many women heading large businesses around the world, and they will be the champions who will get women to think much bigger.

If India has to get to the $5trillion GDP and more, we need to get a lot more women to contribute to the economy, take jobs and maybe invest as well :). Less than 10% of urban Indian women work, lower than Pakistan and Bangladesh.

16 Likes

Yes women flock in. Why just investing ? Do some trading as well. Indian markets would love your vibrant presence.

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In my opinion, the most common myth the world has made every one of us believe from making movies like Clueless and Pretty Woman is that women would rather spend their money going on a shopping spree than do something mindful with it. These are stereotypes. Of course, some do not even like shopping that much (not saying it is wrong).

But the world is changing, and there are more live examples of how women are taking over the financial world by making better financial decisions than just letting the money sit in a fixed deposit.

According to research from Fidelity, women generally like to take fewer risks, which has made them better at risk aversion, research before investing and self-control. These skills combined make them better investors/traders in the long term.

When my income reached the stage where I had to file taxes a couple of years ago, I struggled filing taxes and didn’t understand a word of it, so I sat down, did some research, and was finally able to do it without any help. And that’s how all of us can empower more women to be self-reliant, educating them more about finance.

Also, addressing another stereotype, women are emotional while making many decisions; this is true, mainly because we are more hormonal than stupid. But the research says women are more apt to stay calmer than men in down markets.

Lastly, I would suggest, everyone should use systems to “Invest Like a Woman”, which is thorough research, not giving any extra significance to the money you invest and thinking of it as just another means of income which will eventually help you control the trading emotions that will, in turn, make you a better investor/trader. We have a whole module on trading psychology on Varsity; everyone should read one of these articles daily.

One trait I’ve learned from the research is to outline rules that decide when and why I would invest (I do equity mainly). Setting these rules ahead of time ensures I navigate the market deliberately rather than reacting to the latest fluctuations of financial news. We can all build such strategies, and hopefully, more women will participate in the markets in the coming years and witness more exemplary female investors and traders.

Santé! :slight_smile:

10 Likes

In my perspective, women are better investors. Women will be preoccupied with achieving financial objectives. And the main advantage is that they show less “overconfidence.” This enables women to do more research and invest wisely. They have the upper hand everywhere, from "home to Indian finance ministry.":grinning_face_with_smiling_eyes:

The majority of middle-class women’s savings are invested in physical gold and real estate, particularly in the tier 2&3 cities. We can see huge changes in the economy if we can get these investments into the stock market.

Sir
Just curious, why do we need to get these investments into stock market? Investment does not mean stock market only. Investing in real estate or Gold or anything which creates wealth or income is investing. As everyone knows, one should only do things which one is fully aware off and understanding the product thoroughly is a must. If someone understands real estate or gold, they should be doing that. Investing in stock market is just one of the avenue of generating wealth. I know so many women doing their own business with minimal capital and doing very well. Why should they come and invest in stock market?

Investing or trading in stock is just another avenue of saving money.

Not sure who created the Myth and the Fact. Must be some man sitting somewhere. Women have self doubt they say… Anyone will have self doubt if they are not aware of the product and its functioning and if they are forced to get into this line. I know so many users in this forum who, I am assuming as men and not women do some trade and then come to this forum asking queries… is this not self doubt…

Women know very well what they want to do and how to do it so it does not really matter that all should flock into stock market. Everyone, women and men enter the field of their choice and do things which they are comfortable with and hence women doing trading or investing in stock market must and should be doing well. There is no need for any comparison. They know where to invest and how to invest. This has been the trend since time immemorial.

Disclaimer: These are my personal views only

1 Like

@neha1101 Completely agree with your point that everyone should do their investment as per their interest and with the full awareness of what they’re investing into.

Please check this recent tweet by nithin, which may provide more insight on, why anyone should invest in stock market rather than gold.

2 Likes

No need of complex analysis.
For instance my mother bought few bluechips during peak covid in april 2020 but never did daily checking as most of the time went in household chores.

Result was a beating return.

The best advantage with certain set of women across age groups is they dont track price or news daily. That buy and forget gives ample returns

Better to concentrate on other aspect of lives like cooking gardening after investment. That will work rather than we playing a spolier with too much noise news from all quarters

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From a technical standpoint and go getter attitude men far always doers. But from trading psychology perspective women have a lots of advantage. The problem with us men from what I have noticed is we have too much ego and emotions attached. examples of revenge trading, over leveraged trade, account blown with one trade are mostly done by men. (Imo I did 3 times with small account). Money and emotions are always a nasty mix. Women are a bit sensible and process driven. Men should learn patience and being process driven from women & not attach emotions with money , women should learn from men to take initiative to learn things & be doer.

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Thats what I am saying and asking everyone since first lockdown but unfortunately everyone wants to gamble.

In that perspective, I believe that everything and every asset people invest in would be a gamble, be it gold or real estate; every asset class has a downside; many of us feel safe investing in gold because we see gold prices constantly going up by the day. Which is good, and the physical gold with us in a locker feels safe. But the stress on investing in the stock market is because gold is more volatile and affected by political changes, GDP, inflation, etc. It sitting in the vault will only give us minimum returns. In contrast, it is historically proven that we could make a lot more in the capital market if we did enough research and made efficient investment strategies than any other asset class. And more money is always good :slight_smile:

Capital markets are subjected to riskier investments than fixed deposits and gold, but they also give high returns. While you need a large sum to invest in real estate and gold, in equities, you can start with less than 5K - a better option for salaried women who have a lesser amount to save and invest, also many tax benefits if invested in an ELSS, high liquidity if you need instant cash etc.

This is just a suggestion on personal experience and vouching for the little knowledge learnt. We should always believe in the best financial opinion that works for us :slight_smile:

1 Like

I saw the link you placed. There is actually no citation to anything they have claimed. All links lead to articles on their own website. Which by default disqualify their work.

The article is nothing but just another feel good story for women. Let me honest here, there is no myth that women aren’t good investors.

Anyone who is willing to learn can invest. Self doubt is good thing because it helps you in avoiding and managing risky situations. On other hand I would say women are lot more optimistic when it comes to their world view, which is dangerous.

Every research out their proves women have better IQ, stronger learning ability and higher associative intelligence due to which they can learn and process information at much faster rate than men.

But facts are these, with time

  • There are more women graduating as Engineers but still all top positions are held by men,
  • More women are graduating with Business and Finance disciplines and still all top positions are dominated by men.
  • There are more female doctors than men still highest earning doctors are men.
  • There are more female chefs than men still top 10 chefs of world are men.
  • Women are graduating more with math degree than men. still till now only 17 women have attempted highest level of math exam M55 and most of them failed to clear it.
  • It needs no research to prove that women remember things better than men still in 30 years of its existence only 1 women has won world memory championship. And women did compete in it each year.

If you are intellectually better than men at everything how come men dominate every single field. The rinse and repeat feel good answer is sexism. But the truth is similar to race between tortoise and hare. The hare gets cocky and sleeps while the tortoise keeping moving ahead.

Women are emotional and respond to only feel good variables. People tend to sugar coat things for women to not make them feel bad. A sugar coated truth is always a lie. Therefore men are better at competing because no one needs to sugar coat anything for us.

Next this gender equality thing looks good on paper but by no means is practical in any sense. Men are gifted with 3 times more testosterone than women, higher lung capacity and higher serotonin levels.

These things are indicators of high performance in any individual and men by default have it more than women. This is reason why as women tend to suffer from mental disorder more than men.

The card that women can use against men’s biological advantage is their intelligence which most of women do not use because they value emotions over brain. Very good example is the article link you shared to discuss this topic.

You shared it as fact without looking at any citation to research because it was feel good factor for you. Most men are not going to say anything negative to hurt your and other women’s feelings.

Moderators might delete it for being offensive toward women, again proving my point on sugar coating. For time women will be fed lies by sugar coating facts there is little to no chance of them ever competition with us on highest level.

5 Likes

Never knew that in tradingqna forum the writer need to do research on citation, plagiarism and then post their view or query.

The user found this topic interesting and wrote her/his opinion nothing more nothing less. Many others expressed their comments as well. You have done the same, same blah and blah about women but there was no need to put in the above para.

The funny part is everyone seem to know more about women than a women herself…

There is no chance of them, you mean women, ever competing with us, you mean men on highest level???

Huh??

Yeah moderators should look at ur post in detail

Keeping the women vs men argument aside which is very circular. The structure of your argument itself is a very weak one. It’s a rehash of the old “If you aren’t the best in something why even do it”. It makes for exciting imagery but is of very little value to the world.

These are the areas in which your argument is flawed.

Ironic. You have made a dozen claims below to support the premise, yet there were no citations to go along. Not even a single link. You merely made anecdotal claims without doing of that, maybe because you thought that the reader would know the premise already. So why would you go around asking others to do it, when you do not do it yourself ?

You say it like the traits by itself are of no use to the quality of one’s life. A virtue is a virtue. If you have a athletic physique and you are not going around winning Bodybuilding contests, it doesn’t invalidate anything, a virtue by definition is something good in and of itself.

So ? In saying this you are also saying that not every man who does these things are also in the “Top 10” of these fields. So if every man has 3x Testesterone, 5x this, 10x that, why isn’t every man performing everything at the highest level. This fascination with Top 10s isn’t much use to the general world at large. To be top 10 of anything you don’t just need testesterone, you need everything to go just right and not a small amount of traits similar to pyschopathy. That single minded demonic focus, of leaving everything and just doing something for your whole life. Why should it be a criteria for any human to have that Type-A personality ? Its a personal lifestyle choice. Most men you see around you, or god forbid yourself, aren’t top 10 in the world at anything. Deal with it.

So long as the overall number is good, good enough is good enough.

I would let you read this again, and think it yourself why this statement makes no sense.

Sad, if you only used some of that brain and not come up with an emotionally loaded rant yourself you could make more useful arguments

Coming to the main point of argument is that "Why do you need to “Compete” in Investing ? Competing is primarily the domain of trading. When you invest, you are invested alongside a trend, and you want other people to do exactly what you are looking to do. Where is the ultra competition going on here, I fail to see. Where is the competition in buying 3-4 good stocks and just holding it on for years ? What serotonin you need for something this simple ?

1 Like

Looking forward to a debate on:

Men are better option sellers while women are better option buyers.

Let’s get set myth-busting.

I am sure @nithin should have data on gamma being masculine and theta being feminine.

Both greeks have their own rightful place and need each other to co exist.

If you are expecting people to take you seriously evidence is required. Next investing, trading or competing in job market is not about personal views and opinions, it requires some level of understanding that world is not our servant to work based on our views.

It operates on its own set of rules, you play by those rules or you lose. Getting emotional on every single thing makes you blind to what is in front of you.

Next there are only 3 types of people who understand men’s and women’s emotions. First are those who study Evolution of Human Emotions, second are Clinical Psychologist and third are Emotional Marketers. And even they end up botching several times on their job.

The idea just because I can feel emotion means I can understand it too is too immature. If it would be really possible, no one would be suffering from stress, anxiety or any kind of mental disorder.

Neither men understand their emotions nor women that’s the reason why advertisements work and that the same reason why mental health industry is there.

The funny part is everyone seem to know more about women than a women herself…
Unfortunately that statement ain’t true for men either. Because that requires you to have very good understanding of your own strength and weaknesses.

On other hand the more emotional you are the lesser you understand about yourself. Second emotional people react more to negative emotions . Women are naturally more emotional than men though no evidence is required for that here’s an article for you from Psychology Today

Written by Clinical Psychologist and has more than 20 research citations with proper data. Either you respond or react to negative situations determines your performance in competitive workspace.

The more you will react emotionally the more you intelligence betrays you. This is how a Grade A person losses to Grade C person in job market. Practicality in general wins over Intelligence scarred with emotions.
Have a nice day.

1 Like