It’s already been proven that women are superior to men when it comes to multitasking, leading organizations and longevity—and now we can boast that we excel in another important area: investing. An analysis of more than 8 million clients from investment firm Fidelity reveals that women tend to outperform men—by 0.4%—when it comes to generating a return on their investments. Woohoo!
I’m even more encouraged to learn that over the past few years, Fidelity has seen the number of women investing their money with the firm grow by 19 percent. This means more women are being proactive about saving and investing for their future, something I preach on a daily basis.
Let’s delve into why women are better investors:
1. We are team players. It’s in our nature to be highly communicative, inclusive and willing to share. When we don’t know something, our egos don’t prevent us from finding the answer—either by asking questions or doing research. And we love to share what we’ve learned with our peers because we know there’s no “I” in team.
2. We do our homework. Sure, we may sometimes trust our gut, but we balance that with taking the necessary time to do our due diligence. It’s incredibly important to research the sector you’re investing in, pay attention to red flags, ask a lot of questions and keep pushing until you get the answers you need. Plus, we do a better job of reading people and their body language, so we can pick up on alarming unspoken cues. A 2008 study from the University of California, Santa Barbara, found that men who feel they are being observed and judged by their peers (often other men) tend to make riskier choices in order to assert their dominance. Conversely, women tend to bring more consistent decision-making patterns to all situations. Testosterone must be a tricky beast to tame.
3. We are patient. When comparing likelihood to buy/sell stocks, Fidelity’s client data revealed that men are 35 percent more likely to make trades than women. We don’t feel the need to constantly fiddle with things, and are content to watch things unfold because we did our homework ahead of time. By being more selective and evaluating our moves in advance, we aren’t penalized by things like excessive trading fees eating away at our portfolios. Focusing on buying and holding (after doing the appropriate research to determine the viability of that plan) can lead to far greater long-term wealth.
Capitalizing on our Advantages
Even though we have these three major advantages in our corner, a woman’s success in investing largely comes down to one simple trait: confidence. It’s a smart plan to start out slowly, with smaller investments, and build your portfolio methodically over time. The smaller the investment, the less risk. That’s why I started with a two-bedroom house in Portland, Oregon, for my first investment. Back then, it was terrifying to purchase that property, because that few thousand dollars I invested was a lot of money at the time. But after the first investment went well, our confidence increased. Robert and I graduated to investing in small, single-family homes. As our confidence soared, we purchased a six-unit apartment building. And today, we own more than 1,000 apartment units.
Throughout my career, I’ve capitalized on these three beneficial feminine traits. I shared my learnings with other entrepreneurs in my support team, namely a small group of men and women. I did a ton of research, read books, attended seminars, and learned from trusted coaches and mentors to make sure I was well versed in the investments I was considering. And I practiced patience, by holding onto my investments for the long haul because I know cash flow is queen. How will you put your double X chromosomes to work for you?
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