Are women better investors?

Recent research, according to this article, highlights that women investors have performed better than their male counterparts when it comes to investing despite wage/pay gaps of $.22, lower paying professions, and single parenthood. Investing is hard enough even without all of these headwinds.

Why are women better investors? This article notes their tendency to be more risk averse, their ability to trade less frequently, and their utilization of age-based investments (although the article notes their high fees). Notably, this risk averse investment style has paid off since bonds have bested stocks by .2% from 2000 to 2016.

Statistically, stocks outperform bonds over most periods of time, so 2000 to 2016 is a bit unusual. As such, many women investors may want to consider increasing their stock exposure going forward. What else might help women investors? As suggested by this article, here are some quick thoughts to keep in mind:

  • Develop a financial plan for retirement (you need to know where you are going before you can get there);

  • Maintain at least three (3) years worth of cash when entering retirement, so you need not have to sell your equity stakes in down markets;

  • Always pay yourself first and continue to invest regularly; and

  • Always keep 6-12 months worth of an emergency fund for unexpected expenses or to cover you during a layoff period.

And, above all, keep being a superior investor! For additional information about this topic, click on the link above.