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Simple Smart Investing

 

Investing "like a woman" pays - 

not convinced, just ask Warren Buffet*

Warren Buffet is "arguably the best ever long-term investor." See: Warren Buffett Invests Like a Girl: why women are investment naturals, SMH)

 

The ability of women to stay the course and not react to or try to beat markets is one of the reasons the portfolios of women generate higher returns than those of men.

 

The recovery of the London stock market to pre-Brexit levels within days of the 900-point sell-off illustrates why investing like a woman pays off. Investors that sold in response to the sell-off paid dearly for "jumping the gun", and those quick enough to realize their mistake, and re-established positions likely did so at a higher price than where they sold, and incurred unnecessary sell and buy fees. 

Recent studies continue to support the seminal study, Boys will be boys: gender, overconfidence, and common stock investment, from the University of California, Davis, showing that women investors beat their male counterparts by around 1 percentage point a year.

With long-term returns from the stock market averaging 5 percent a year, 1 percentage point is a significant part of overall return. Resisting the urge to trade in-and-out of positions to try for market tops and bottoms, women incur less fees increasing their overall return. Women also do more research, and subscribe to a buy-and-hold investing philosophy that weathers market cycles.  

The market goes up, and the market goes down. Historically, which is not a predictor of future performance, over the long term the market has gone up. Currently, there are as many experts calling for another sell-off as there are calling Brexit a “buying opportunity.” Regardless of direction, I agree with KKR’s head of global macro and asset allocation, Henry McVey, that this is an "Adult Swim Only" market in which investors need to tread cautiously.

The ability of women to stay the course and not react to or try to beat markets is one of the reasons the portfolios of women generate higher returns than those of men. The recovery of the stock market to pre-Brexit levels within days of the 900-point sell-off illustrates why investing like a woman pays off. Investors that sold in response to the sell-off and then re-established positions likely did so at a higher price than where they sold, and incurred unnecessary sell and buy fees. 

Bottom-line

If you are investing, or considering selling or buying securities, speak with a financial professional and create a plan which takes into consideration all relevant variables, both market and those unique to you, including risk tolerance, income, expenses, debt, savings, liquidity needs, portfolio holdings, assets, time horizon and investment goals.

This content of this post is provided for educational purposes only. It is not and shall not be construed to be investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.