Reasons Women Outperform Men Investing In Stocks

Published by Linda Brown on

There are many reasons why women outperform men investing in stocks. Numerous studies have shown that women are better investors than men and earn higher returns on their stock investments. Women have different stock strategies than men.

“Studies have shown men tend to be much more risk takers, when it comes to investing, to their own detriment because they often trade too much,” Bankrate Chief Financial Analyst Greg McBride told Investor’s Business Daily. “Women tend to generate better returns because they don’t trade as often and tend to hang in there.”

Women are more patient than men when they invest in stocks! Women tend to trade their stocks less which saves them money in brokerage fees and taxes.  Men do not hold onto their stocks as long. Many buy and sell their stocks much more frequently.  In many cases, perhaps this is often due to male overconfidence.

Another reason women perform better is that women use a “buy and hold” strategy.  Many women hold their stocks for more than a year.  This gives them the advantage of a special “long-term capital gains” tax rate when they do sell their stocks.  Long-term capital gains serve to decrease their tax liability resulting in fewer taxes to pay. 

Individuals who trade frequently incur “short-term capital gains.” These gains are incurred when stocks are held and sold in less than a year.  These gains are taxed at an individual’s ordinary tax rate.  This could prove very costly if one were in a high tax bracket!  Not a good deal!

In addition, women investors do not take as much risk as men.  Taking less risk and not selling (or, buying) “prematurely” pays off for the female stock investor over the long-term.  Women realize that stocks can be risky, especially in the short-term.  Women, also are more likely to stay the course and tend to panic”less” than men during market downturns!  All of these strategies are to their advantage. 

Moreover, women outperform men when it comes to doing the research on the companies stocks they are interested in.  Most women realize how important research is and make the time to carefully scrutinize the company before purchasing its’ stock.   

Women also are “less” inclined to believe in fast “get-rich schemes” than men are.  They are less concerned with “outsmarting” the market than men.  Women investors tend to be more conservative with their investments than their male counterparts.  Many women stick to their goals better with a specific end goal in mind for their monies!

Another advantage women investors have is that they are team players.  Women, more than men, tend to be highly communicative and are more willing to share information with one another. They are also quicker to ask questions on their investments than men are.  

In conclusion, research has shown that women outperform their male counterparts and make great stock investors! Overall, studies have proven that women are “gifted” investors!  Women are more patient and hold onto their stocks long-term reaping extra rewards in the process.  Women are also more willing to do the necessary homework before investing.  Moreover, they are not willing to take as much risk, or panic, during downturns in the stock market as men.  

Linda Brown

I'm an Accountant, Blogger & Investment Consultant with a "Bachelor of Business Administration"degree. Teaching women how to invest in stocks successfully! Men welcome!