Women and Investing: Why Women Can Be Better Investors Than Men

Women and Investing: Why Women Can Be Better Investors Than Men
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Men make the majority of financial decisions in many households, but some studies suggest that women may be superior financial decision-makers—at least when it comes to investing.

A six-year study by two University of California-Davis professors evaluated data for more than 35,000 households from a large discount brokerage firm. The data revealed that men traded 45 percent more frequently than women. Trading reduced men’s net investment returns by 2.65 percentage points per year, while only reducing women’s returns by 1.72 percentage points.

The reason for the difference in investment performance appeared to be overconfidence. Men were more likely to think they spotted great investment opportunities and to act on impulse. Women were more likely to stay the course with their investments. Men often didn’t make good investment choices — and trading investments often led to more fees, as well.

In her book Warren Buffett Invests Like a Girl: And Why You Should, Too, author LouAnn Lofton echoes those findings: “The way women tend to approach investing is healthier and calmer, and it’s the way we should all approach investing,” she writes.

Even though women’s traits can make them superior investors, a 2014 survey by Spectrem Group, a consulting firm, found that only 50 percent of women feel “very” or “fairly” knowledgeable about financial products and investments, compared to nearly 80 percent of men. The survey also found that women are less involved with day-to-day financial management and investing than men.

Despite lower involvement with finances, women’s better investment performance — and less tendency to react impulsively or invest too aggressively — suggest they could help improve their portfolio’s return by being actively involved with how it’s invested. Here are some ways you can do that:

Review your statements. It’s important to know what investments you own and how your money is managed and invested. Reviewing bank and other financial statements that come in the mail or via email is one way to get a quick overview.

Meet with your financial advisor at least once a year. Having at least annual meetings with a financial advisor can help ensure that you stay up-to-date on all your financial decisions. Regions Wealth Advisors can help you and your family review your assets and investments and answer any questions you may have. A Wealth Advisor can also help you evaluate investment opportunities and find investments aligned with your specific goals and needs.

Get a Regions Wealth Assessment®. A Regions Wealth Assessment is a tool that Wealth Advisors use to help clients review their assets and identify potential strategies for improving their long-term financial plan. For example, it can help you allocate your wealth in a way that protects your current lifestyle. It can also help spark conversations with your Wealth Advisor about how to better align your investment strategy with your long-term needs and goals.

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This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.

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