Did you know that your fear of investing can actually make you better at it?
When I was nine or ten, I had a pale pink tee that read Anything Boys Can Do Girls Can Do Better. The felt iron-on letters were peeling and cracked from numerous washings yet still, I wore that shirt often. And proudly. As I got older, I was tired of all the pitting boys against girls, it seemed unfair – and more importantly – untrue. We’re equals, right?
Um, turns out, not really. At least as far as investing goes. We really do it better than men. At least according to a recent study by Barclays Wealth and Ledbury Research. As David Weidner at MarketWatch writes, “They found that women were more likely to make money in the market, mostly because they didn’t take as many risks. They bought and held. Women trade this way because they aren’t as confident — or perhaps as overconfident — as men, the study found.
Turns out another academic study shows that women earn 1% more annually investing than men. It’s not that I’m surprised (I’m not) I just wonder, since women perform better at this than men, why are there not more of us doing it? The study suggests that our need for self-control keeps us from trading as often as men, and that leads to higher financial results.
Weidner then goes on to become my new bff, by promoting the theory, that actually, women are better at just about everything. He points to a new book by author Dan Abrams, “Man Down: Proof Beyond A Reasonable Doubt That Women Are Better Cops, drivers, Gamblers, Spies, World Leaders, Beer Tasters, hedge Fund Managers, and Just About Everything Else”. (Apparently we are also better at book titles too
From Weidner: “As Abrams notes, women are better soldiers because they complain about pain less. They’re less likely to be hit by lightning because they’re not stupid enough to stand outside in a storm. They remember words and faces better. They’re better spies because they’re better at getting people to talk candidly“.
This is interesting fodder for discussion. I would also add that I would make a terrible spy – the risk of being captured by big burly men in trench-coats and an unhealthy interest in dentistry is enough to turn me off it completely (those coats are so unhip, right?). And that my avoidance of lightening has not so much to do with intelligence as an absolute fear of it. I may not froth and whine like my dog does during a storm, but no amount of persuading would get me outdoors in a storm.
Hmmmmmm…..so is it possible that our fears manifests themselves into self-control? And that self control is what gives us the upper-hand at times? Or are we really just better at all of this than men? I genuinely want to know what you think.
(postscript: This goes beyond the scope of this post but if you have a few minutes, I strongly encourage you to read some of the comments left on the original post by David Weidner. It is probably the most insulting and negative comment thread I have read on a finance article ever. There are over 500 comments and most of them raised my blood pressure by at least half that.)
When her youngest child caught her stealing from his piggybank, Marci O’Connor realized she needed to gain control of her finances. She has made it her goal to educating herself about personal finance and investments, and share what she’s learned with her readers. Marci chronicles her journey on beingmarci.com. To read more posts written by Marci visit Wall Street Survivor. Wall Street Survivor helps people invest in the stock market with confidence, giving them fake cash to invest in real companies, in real-time stock conditions. It makes understanding finance painless, and rewarding.
The best lessons for me in managing my money came when I started running my own business. When you have limited cash flow but ongoing expenses you are forced to analyze and prioritize. I think the stereotype that women are poor at managing money is old news and that with experience women can apply their life experience and good sense to investing as well!