Women Make Better Investors

Women earn high marks for being good stock market investors. Here are some interesting facts about women and investing.

• Women live five to 10 years longer than men.
• On average, women become widows at age 58.
• 80-90% of women will be solely responsible for their finances at some point in their lives, according to the National Center for Women and Retirement Research.
• More than half of all stock market investors are women.

By 2010, women will hold half of the private wealth in the United States.

Women are better investors than men. The University of California at Davis found that women’s portfolios gained 1.4 percent more than men’s between 1991 and 1997. There are several reasons women have more success as investors.

Women look at more than the numbers. They relied on their everyday life skills to pick companies that offered quality products and services. They used their own direct contact with companies to determine the value of the company before investing, i.e. using Tide detergent, shopping at Target, or eating Snackwell Chocolate Cookies. Women decided on investments based upon their personal responses and contact with the companies they chose.

Women take less risk and make realistic and conservative decisions when it comes to investing. Men traded up to 45% more often than women did. Women tended to be long-term investors and remained loyal to the companies they had chosen to invest in.

Women avoided hot tips and used their better judgment and knowledge when investing. Women tend to be less impulsive and consider choices carefully when investing.

Women considered the ethics, values and culture of the company and matched their own ethical and philosophical background when choosing to invest in a company. These methods seemed to help with their investment success. Women tend to research companies and learn about the company before investing.

Beliefs and attitudes were another important factor in many women’s investment choices. Many companies develop platforms and advocate for environmental causes, children, families and the poor or underprivileged. Women are sensitive to these actions and often join with these types of companies by becoming loyal and dedicated investors.

For more information about these ideas, review the Help Yourself section or Ask Dr. Nancy. She would love to hear from you and answer your questions

Based on Morgan Stanley’s
 Spring 2004 Investor’s Quarterly