Women investors have been steadily making their mark in the world of finance, demonstrating unique approaches that often lead to better investment outcomes. In fact, research reveals that women perform 0.81% better on their investments than their male counterparts each year1. Though this may seem like a small margin, the cumulative difference over time can be substantial due to compounding. By understanding these strategies, both men and women can learn valuable lessons that can contribute to their own investing success.
Key Insights from Women Investors
1. Embrace a Long-term Perspective
Women investors often adopt a long-term perspective, focusing on their goals and prioritizing stability. This approach can lead to more consistent returns, as it enables investors to benefit from the power of compound interest and navigate market fluctuations more effectively. By maintaining a long-term outlook and avoiding impulsive decisions, investors can build wealth over time and achieve financial security.
2. Focus on Financial Education
Women tend to value financial education and actively seek advice from professionals. Developing a solid understanding of financial concepts and investment strategies empowers investors to make informed decisions and manage their portfolios with confidence. Being actively aware of recent industry developments can enhance an investor’s ability to identify potential opportunities and risks.
3. Diversify Your Portfolio
Diversification is a key strategy that female investors employ to mitigate risk and achieve more consistent returns. By spreading investments across various asset classes, industries, and geographical regions, investors can reduce the impact of market volatility and protect their portfolios from significant losses. Diversification not only offers a safety net during uncertain times but also exposes investors to a variety of growth opportunities, leading to a well-balanced and more resilient portfolio.
4. Adopt a Disciplined Approach
Discipline and patience are essential traits in women investors1 strategies. For instance, women trade stocks 49% less frequently than men, and trade funds 67 % less2. Adhering to a well-defined plan and avoiding impulsive decisions based on emotions or market hype can substantially increase the likelihood of achieving long-term financial goals. By setting clear objectives, establishing guidelines, and regularly reviewing your portfolio’s performance, you can ensure that your investment approach remains disciplined and focused on your goals.
5. Prioritize Values-based Investing
Many women investors emphasize values-based investing, incorporating social, environmental, and governance (ESG) factors into their investment decision-making process. Aligning investments with personal values allows investors to contribute positively to society while also pursuing financial returns. Values-based investing can help investors stay true to their principles and foster a sense of purpose in their financial journey.
6. Don’t Shy Away from Taking Calculated Risks
While women investors are known for their conservative approach, they are not averse to taking calculated risks when the potential rewards are significant. Assessing risks and opportunities carefully and making informed decisions can lead to higher returns without compromising overall portfolio stability. Striking the right balance between risk and reward is essential for long-term investment success.
7. Cultivate a Strong Support Network
Women investors often rely on strong support networks, including financial advisors, mentors, and peers, to exchange ideas and gain valuable insights. Building and maintaining such a network can help investors stay informed, make better decisions, and remain accountable to their financial goals. Engaging with like-minded individuals and experts can broaden your perspective and tap into a wealth of knowledge and experience.
We can learn valuable lessons from women investors who continue to demonstrate their prowess in the world of finance. Embracing these key insights can lead to more informed investment decisions, a well-balanced portfolio, and greater financial stability.
1Owens, Isabel. “Do Women Really Make Better Investors than Men?” Subscribe to Read | Financial Times, Financial Times, 30 Apr. 2019, https://www.ft.com/content/f3835072-66a6-11e9-9adc-98bf1d35a056.
Moran Wealth Management® offers a uniquely advantageous position for female investors. We take pride in the fact that 55% of our team is composed of women, including seven female equity partners and two senior portfolio managers. This gender balance not only makes our team diverse and robust, but it also ensures that our approach to financial management resonates with the distinct viewpoints that all investors bring to the table. Our financial advisors at Moran Wealth Management® are committed to assisting you implement key insights and create customized plans that cater to your specific financial objectives. Consider contacting our team today by calling 239-420-4440 or visiting our website at moranwm.com.