Male vs Female investors: Do They Have Different Mindsets

Male vs Female investors: Do They Have Different Mindsets
Male vs Female investors: Do They Have Different Mindsets

The following article makes for a compelling read and so I thought I would highlight an excerpt of this article before getting to the story at hand:

Amid its biggest about-face in nine decades, a funny thing has happened in the U.S. stock market. Rather than loosen their grip bears have grown ever-more impassioned. They’ve sent short interest to an eight-year high and above $1 trillion, by one analyst’s math. Position reports from the Commodity Futures Trading Commission show mutual fund managers are more sceptical now than any time since at least 2010.

Our view of an expert is an EX Spurt, in other words, a spurt that never was or never will be. These penguins are shorting the market to the tune of $1 trillion dollars. Sure this could trigger a correction, but they started to short the Markets a long ago. At the height of the correction, they might if they are lucky hit breakeven. Do you think they will have the sense to bail out at that point?” One Trillion Short could push the Dow past well past 18,000. Most Hated Bull Market ever not Ready to Crumble

Male vs Female investors: It’s all about Mind Set

Men are financial daredevils who like risk, and women are cautious and want security — that the standard cliché. Said another way, men are thought to be more risk-friendly than women. Or to rephrase the title of a bestseller, “men buy shares from Mars and women have a savings account on Venus.”

For instance, women are generally more interested in such issues as ecology, ethics and microcredits. However, when it comes to the crunch, this interest does not always have an effect on the actual investment decision.

Another study conducted at the Centre for Financial Research at the University of Cologne found that female fund managers switch around their portfolios less than their male colleagues. Furthermore, women’s strategies and subsequent performance tend to be more stableFull Story

Male vs Female investors

The key takeaway from the research, as Matt Phillips once explained in Quartz, is that pretty much everything on Earth, including financial markets, would run better if women were in charge.

The conclusion is grounded in repeated findings that women tend to have lower financial risk tolerance than men and make smarter, more calculated decisions about their investments. What’s more, women tend to be less competitive than men, who are disposed to competing even when they’re more likely to lose.

Though performance isn’t much different by gender in the professional investing world (especially when comparing US fund managers), new research from Stashan investing app, suggests that at the individual-investor level, women may be wiser investors than men. Moreover, the findings dismantle stereotypes about the appetite women have for risk. Full Story

Females seem to be more risk-averse

Women’s self-doubt about investing is unwarranted when you look at the facts. Several studies have shown that women are better investors than men as a whole. A study from Fidelity Investments, based on data from more than 8 million clients, showed that women performed better than men by 0.4%  Opens a New Window. While this doesn’t seem like much, it can have a huge impact over time, especially when combined with the fact that women tended to save slightly more out of their paychecks toward retirement.

For example, the higher rate of return would mean that a woman who invested 9% of her salary annually (the average for women) starting at age 22 would end up with 15% more at age 67 than a man who invested 8.6% annually (the average for men).

Another study by Wells Fargo showed that women who managed their investment accounts not only saw higher returns  Opens a New Window. than men, but also that their returns showed less variability. Full Story

Tactical Investor Take

Women, in general, do make for better investors as they are more likely to stick with a plan and focus on the long term trend. Men in general (please note the words in general as at the top end of the spectrum men tend to excel) tend to jump in and out of investments more often; they are looking for momentum and in doing so often miss the trend. Markets go through phases up, down and sideways. Jumping in and out otherwise known as churn does not usually lead to good results. Having said experts should focus on how both groups can improve their results rather than focusing on their differences. We addressed this topic in detail under this article which states all stock market crashes should be viewed as opportunities. Here’s an excerpt from that article:

Why Stock Market Crashes should not be feared

So you ask why because it’s a prelude to a Massive Bull Run.  Stock market crashes represent opportunity, it requires a change in the angle of observation.

It all depends on what side of the fence you sit on. If you decided to pour all your money into the market close to the top, then it would be viewed as a tragic event. If on the other hand, you got in early and as the market trended higher, you banked some of your profits then it would be viewed as a splendid opportunity.  Crisis investing dictates that all disasters are nothing but opportunities, change the lens and the picture changes.

Markets spend more time trending upwards.  Who won the war from 1990-2017, the bears or the bulls?.   Even the terrible and devastating crash of 1987 turned out to be a buying opportunity and not a disaster. The naysayers and doctors of doom were wrong once again.  Hence, you have clear proof that the Doctors of Doom are good at only selling you crap they would never dream of using themselves.

The ball is in your court,  compile a list of strong companies you always wanted to get into and slowly commit some funds to them.  Or you could sit down and do what you have been doing all along and hope for a different outcome.  Doing the same thing over and over again and hoping for a new outcome could be construed as being insane. Market Crashes Should Not Be Feared

Other articles of interest:

Most Hated Bull Market ever not Ready to Crumble (May 10)

$1 trillion worth of shorts set to drive Dow higher (May 5)

College Graduates Drowning in debt refuse to give up luxuries (May 1)

China launches civilized tourist program (April 29)

Alibaba poised for Strong growth & continued success (April 28)

Innovations Key Growth driver for China’s new economy States Brookings (April 26)

China-Pakistan Economic Corridor moving forward (April 24)

Cooperation essential for Nuclear Security (April 23)

China takes a pragmatic approach to Green Energy (April 22)

Report by CSIS on China Belt & Road worthless (April 20)

Foreseeing stable economic growth ahead (April 18)

Stock Market Crash 1929 & Why Market Crashes Should Not Be Feared