What If It Had Been The Lehman Sisters?
Like many of you I’ve been observing the roller coaster ride that the stock market, indeed our economy, has been on for the last few weeks. I believe that when we take a look back at this financial time we’re going to see that female investors have fared better than their male counterparts.
Women investors have long been criticized for being risk-adverse, research-focused and slow to change. Yet, these characteristics should be praised rather than condemned in today’s fluctuating market. In fact, financial advisors are advising their clients to stay the course and not buy and sell in reaction to daily changes.
A study in the February 2001 Quarterly Journal of Economics found that men turn over their portfolios 45% more each year than women. The authors, finance professors Brad Barber and Terrance Odean, attribute this to men's overconfidence. This cockiness carries a price, with men's trading hurting their stock performance by 2.65 percentage points a year, while women hurt their results by 1.72 percentage points. (WSJ)
Women have a fundamentally different perspective on investing than men. They research, they look long-term. They have a buy-and-hold strategy that may not be as “exciting” as a man’s approach – but that doesn’t mean it’s less profitable – especially right now.
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