One of the most harmful beliefs that has held women back from investing in the past is the belief that men are better investors than women. This is a belief that you might have also held at some point but the good news is that scientific research has come to conclude that it’s quite the opposite! While the trading floor may be overrun with men, it is the women that are primed to excel at the numbers game.
At first glance, the numbers may not look all too encouraging. "Women are nearly 50 percent of the workforce, yet still only represent less than 25 percent of the investment industry," says Kathleen A. Grace, managing director at United Capital based in Boca Raton, Florida. While those figures are nothing to get excited about, a decades-long study conducted by Terrance Odean at the University of California, Berkeley has found that "single female investors outperformed single men by 2.3 percent, female investment groups outperformed male counterparts by 4.6 percent, and women overall outperformed men by 1.4 percent.” What a liberating set of findings! With mujeres excelling points above their male counterparts, investing “like a man” can actually prove detrimental to a woman’s financial future.
Embrace the Differences
The behavioral differences that exist between how men and women invest has long been a deterrent to a greater influx of female investors. Yet, studies have shown that women more frequently opt for long-term, diversified investments that result in increased financial success while male investors often strive to beat the market resulting in actively trading away investment gains in the process. With this type of data on our side, women can begin to ditch the pressure to emulate the investment traits of men and instead embrace the value that her approach brings to the table. For women, it is vital to understand that men aren't inherently better investors, they are just far more confident in their approach.
Investing Can Be a Test of Confidence
Great confidence is necessary to embark on any great feat and it is that confidence that can catapult most men to get into and stay in the investment game. Conversely, it is a lack of confidence that keeps a lot of smart and savvy women out of that very same playing field ultimately wreaking havoc on her financial security. On average, women are likely to live 3 to 5 years longer than men and with this longer life expectancy at play, it becomes essential for a woman to take on a more active role in her financial well-being long before those golden years arrive.
Power in Truth
Dispelling the myths that perpetuate investment intimidation for women is a critical step towards seeing and experiencing greater inclusion in the investment industry. As a woman reading this now, you are part of the phenomenal group of women taking ownership of their money and simultaneously changing the financial landscape for all women. You go, mujer!`
Take the Next Step
Now that we have set the record straight on some of the myths that have chipped away at a woman’s confidence as a potential investor, let’s build upon that new-found confidence by taking inventory of personal finances, including any money-generating assets and money-draining liabilities to gain a greater overall picture of where you are at and where you can best focus your financial efforts.
To learn more about this and other money tips, download our FREE ebook “How to Become a Confident Inversionista and Start Making Your Money Work for You” made in collaboration with Ellevest.