A study conducted by Fidelity, an investment firm in the US, found that in 2016, female investors had outperformed their male counterparts by 0.4 percentage points. The same conclusion was arrived at by Openfolio which is a US investment tracking app with 60,000 American investors.
In another in-depth study conducted by the UNSW Business School and headed by professor Peter Swan, the conclusion was unanimous that women investors outperformed men. This study was focused in Finland and spanned a 17 year period.
It involved stock trading in 28 major Finnish stocks and concluded that female investors gained an equivalent of $276.60 million in profit over the studied time period. That represents a compounded rate of return around 21.44% per annum.
Women Outperform Men In Property Investments Too
According to recent data from the ATO, nearly half (47%) of Australia’s property investors are now women. This is a significant rise in female property investors and can mainly be attributed to the fact that, even today, women earn less in the workforce compared to their male counterparts. For this reason, savvy women are turning to wise property investments to boost not only their income but also their long term retirement planning goals.
An analysis of the ATO data has revealed that women investors are much more savvy when investing in real estate for the long term. They are also consistently buying properties with better rental returns and ones that are offering a more solid long term growth.
Women tend to start investing in property at a much younger age (under 35) than men and while they’re still single. On the other hand, a significantly smaller amount of men invest in property while they’re single and will start their property investing at an older age.
It is also common that women are far better at saving for a deposit and will tend to avoid risky investment opportunities. They do more research and are willing to seek advice and learn all they can about their investment options.
So Why Do Women Make Better Investors?
There are 5 solid reasons that women seem to be better at investing than men. Let’s look at these in more detail.
1. Women Spend More Time Researching
Before making any kind of investment decision, women tend to do extensive research and try to gain as much knowledge as they can. They’ll seek advice from financial professionals before entering into any kind of property investment deal. Women are also more focused on the long-term financial growth of their investments rather than any quick money making strategies.
Most women property investors will spend time researching the ideal property to invest in and will consider the rental returns, the type of people who are likely to rent the property and the long term growth potential of the investment property.
On the other hand, men are more focused on finding the next hot spot and are more likely to jump into a property deal without doing extensive research on the growth potential.
2. Women Are More Conservative In Their Expectations
As a general rule, women tend to be much more conservative in their investment decisions and prefer to buy a property with minimal risk and sometimes lower returns in the short term. They’re more willing to hold onto a property for longer, knowing that eventually the values will rise.
Because women investors are inclined to hold onto their properties for longer, many have more than one investment property which means that their investment portfolio is worth more too.
3. Women Investors Are More Disciplined
Because of their extensive research up front, women are not panicked by changes in the current market. They believe in their investment decisions and are more than happy to keep holding onto their investment properties until the market becomes favourable again.
They tend to set long term goals and plans and are disciplined enough to stick to them even in the face of so called adversity. In fact, many more single women are now investing in property as a way of funding their retirement plans as they know that their superannuation savings will not be enough to sustain a comfortable lifestyle in retirement.
4. Men Are Sometimes Overconfident In Their Investment Decisions
Being confident is great when it leads to wise decision making however, being overconfident can lead to bad decisions when it comes to believing that you have total control over your investment returns which in property, you mostly don’t.
Men will generally turn over their property portfolio more frequently as they chase better returns. This of course, can incur a lot of extra costs and can also mean that they may buy and sell at the wrong times as they look for higher profit returns.
5. Women Are Not Afraid To Ask For Help And Guidance
is is a little like asking for directions which is something men don’t have a natural capacity to do. Women on the hand, are natural networkers and will seek advice and guidance whenever they can. They’re not afraid to ask questions and will regard any advice given with much thought before they take any affirmative action.
There’s no hiding the fact that women and men are wired differently when it comes to making investment decisions. Whereas men will jump into investment deals, especially if they promise better than average returns, women will do extensive research first and then consider their options before making a final decision.
Women are generally not swayed by glossy advertising brochures and the hype of how much they can make if they invest now. Their main goal is creating a long term investment strategy which will help them to pay for their children’s education or furnish their retirement so that they can retire comfortably.
So there you have all the reasons why women are better investors than men. And these are most likely the reason why many more women are buying investment properties and will continue to do so well into the future.