Men tend to have more confidence in their investing prowess and are a bit more likely to participate in the stock market. Gallup research shows that 56 percent of men currently own stocks, compared to 52 percent of women. But that doesn’t mean that men are better at it.
Female investors outperform male investors on average, and a new report from Wells Fargo attributes the better performance to the following three traits more common in female investors:
1. Patience. Single women traded 27 percent less frequently than single men, according to the study. The direct and indirect costs associated with frequent trading can diminish returns.
2. Discipline. Women were more than 10 percent more likely to stick to their long-term investment plans than men. Investors who attempt to time the market tend to have lower returns over the long haul, compared to those who stay the course.
3. Willingness to learn. Women are more likely than men to pursue education and advice from financial advisors. Professionals can help individual investors develop an appropriate financial plan, which is key to long-term success.
It’s important for women to recognize their capabilities as investors, since they’ll need a larger nest egg than their male partners. Women make less money than men on average and have longer lifespans, so financial security for them means stretching fewer dollars over a longer term.