Investing like a girl

Investing like a girl

What you can learn from female investors

How do you feel when someone asks you to do something like a girl? Offended? Humiliated? How is it that “like a girl” has an underlying meaning of weaker, lower quality and generally inferior than what a man would do? In 2014, Always launched a profound campaign redefining the meaning of “like a girl”. The campaign was a huge success and 76% of viewers after watching the campaign said they no longer viewed the phrase negatively (1).

In light of this, I caught myself wondering what investing like a girl means. 

Investing isn’t a man’s world anymore; however, according to WealthiHer, women are half as confident as men when it comes to investing. Nevertheless, when they decide to invest, they seem to be better than men! One of the most famous and ground-breaking study on gender differences in investing is "Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment (2001)”, which showed due to overconfidence, more men fall victim to reduced investment returns. A recent study by Fidelity (2) covered 5.2 million customer accounts and concluded that when women invest, they outperform their male counterparts by 0.4% annually over a 10 year period.

I embrace equity and I believe that men and women are equal when it comes to our cognitive capabilities. However, if certain traits are perceived to be more feminine, then I am curious to know which ones would lead to higher figures in my investment portfolio:

  • Long term focus. Women tend to take a longer-term view on finances which gives them a powerful advantage.
  • High conviction. Women tend to trade at least 50% less.
  • Research. Women spend more time researching their investment choices. 

In my experience working as a client advisor, I noticed that women are more engaged in the “why’s” of investing. They are often more eager to develop a bigger picture plan before drilling into the details. 

At the risk of sounding like I am stereotyping, next time you are making an investment decision, consider investing “like a woman”. Or at least consider balancing both approaches. It might pay off.

Whilst writing this blog, I found a book with the flashy title of “Warren Buffett Invests Like a Girl: And Why You Should, Too”. It should be an interesting book, let us know if you have read it.

Sandra Dailidyte
Investing isn’t a man’s world anymore; however, according to WealthiHer, women are half as confident as men when it comes to investing.
About the author
Sandra Dailidyte

Sandra Dailidyte

Sandra looks after wealthy individuals and their families. She is based in the Edinburgh office and her clients are mainly in Scotland and London. She advises the families of some of the most successful business owners in the country and seeks to build long-term relationships based on trust and a high-level of communication and service.


  1. https://medium.com/ad-discovery-and-creativity-lab/always-likeagirl-5d4c2b1472c3
  2. https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/FidelityInvestmentsWomen&InvestingStudy2021.pdf



Non-Independent Research
The information contained in this article is defined as non-independent research because it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, including any prohibition on dealing ahead of the dissemination of this information.

How to Use this Information
This article contains general information only and is not intended to constitute financial or other professional advice or a recommendation that any recipient of this information should make any particular investment decision. Always consult a suitably qualified financial advisor on any specific financial matter or problem that you have.
Except insofar as liability under any statute cannot be excluded, neither Brown Shipley nor any employee or associate of them accepts any liability (whether arising in contract, tort, negligence or otherwise) for any error or omission in this article or for any resulting loss or damage whether direct, indirect, consequential or otherwise suffered by the recipient of this article.

Investment Risk
Investing in stocks either directly or indirectly carries investment risk.  The value of equity based investments may go down as well as up over time due to factors such as, market volatility, interest rates, and general economic conditions.

Information correct as at March 2023
.

Past performance is not a reliable indicator of future returns.


 
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