What financial beliefs about women have you faced? At first look over the subject, men and women seem to have significantly different financial attitudes. Investment advice often starts from the premise that women need to learn more about finance and that they need better financial education.
The bare truth seems to be different
The belief that women are spending huge amounts of money and don’t think about financial risks is something wrongly underlined even in media and even in a lot of commercials. Also, many financial advisors assume that women have and want less control over their investments.
It turns out that female investors consistently outperform their male counterparts, which increases the chances of some serious savings at an older age.
Understanding how women invest beyond financial beliefs and why they excel can help us all, regardless of gender.
Risk or self-control?
Studies show that women spend more time researching choices when it comes to investing. And while they take fewer risks than men, that doesn’t mean they’re risk averse. Rather, they are more likely to take appropriate and balanced levels of investment risk than men. The results thus become better.
This prevents women from chasing get-rich-quick or miracle investment tips or trading on a whim, behavior that usually ends up weakening men’s portfolios. That’s according to their investment personality says Marissa Greco, financial planner at Greco-Nader Wealth Navigation.
Another good investment practice that women have is investing in the long run. Are they calmer than men when it comes to moments of the market going down? It seems they are. This protects them from losing too much when the market suffers a huge decline. In addition, we found out that, “men trade with 45% more often than women (estimated numbers for Europe), although men seem to be more confident when it comes to says Greco. “Because they don’t put such an effort in research and education as women men tend to reduce their net profits making fast moves on the market.”
Men are more likely to consider themselves investors. They are more confident in their investment knowledge but also in their ability to deal with unexpected financial situations
Careful! These lower net returns are not just from poorer investment performance. Trading, however, may result in additional fees and higher fees for their investments.
Financial studies and beliefs
Researchers show us that men have lower performances when it comes to investing than women. This leads to big losses during an investment.
For having some positive investment attitudes you just need to follow a few basic guidelines.
An example might be navigating the market deliberately rather than reacting to the latest vagaries of financial news.
What does the income gap tell us?
Some researchers put it obvious that women perform better than men when it comes to some types of investments, but women are still hesitant to invest. This may be due in part to the income gap between women and men.
It is said that women simply have less spare money to invest. However, these findings are misleading.
In Europe, women’s income levels are estimated to be 20% lower than men’s, on average. If we think to have look at men and women with the same income rather than comparing all men with all women), differences in money-spending behavior, investment attitude, and great confidence in managing money are no longer significant.
Conversely, depending on race and ethnicity, this gap can be larger or smaller, affecting women’s ability to invest.
Financial beliefs, in couples
There is of course also the case of couples working together for long-term investments.
According to studies, you have clear benefits as a woman if you share long-term planning responsibilities with your partner:
- 94% of women report greater confidence in their financial future
- 93% of women report fewer mistakes made with both parties when both parties are involved
- 91% of women say they are less stressed about their finances when they are in a relationship.
Yet despite their performance, women are less confident than men when it comes to judging their financial abilities: A 2021 report also surveyed 2,400 American adults who are actively contributing to a retirement account at work, showing that only 4 in 10 women are comfortable with their investment knowledge.
Come and talk about your financial beliefs and how to regain your confidence. Regardless of gender, you can recreate positive investment characteristics with the help of a financial coach.