High heels and handbag finance

High heels and handbag finance

MARS and VENUS on the stock exchange: why women make better investors

“When men and women are able to respect and accept their differences, then love has a chance to blossom.”

“Men need to remember that women talk about problems to get close and not necessarily to get solutions.”

“When negative feelings are suppressed positive feelings become suppressed as well, and love dies.” 

“Fortunately perfection is not a requirement for creating great relationships.” 

Men are from Mars, Women are from Venus by John Gray

This article isn’t about love or how to engage in a mutually fulfilling relationship, but rather a mild cliché and broad generalisation of the male versus female investment psyche.

Over the past decade, a plethora of global studies conducted by banks and investment firms have evidenced that women make better investors than their male counterparts. Whether this is down to stereotyping or the age-old battle of the sexes, I am not sure, but here are just some reasons why women are believed to make better investors (use them when confronting a big decision or embarking on a new path):

  1. Men are more competitive. Testosterone may be good for healthy competition, but when it’s all about bragging rights and the benchmark is beating your rivals instead of absolute returns, men take riskier bets that are less likely to pay off. It’s significant to note that for thousands of years, testosterone signalled that a man had strong spacial intelligence, was good at hunting and could find his way back home.
  2. Women take fewer risks. This is a complex algorithmic formula that explains why every woman has four little black dresses instead of one (katabolic slimming). Some risks are worthwhile and certainly pay off! But chances are when taking a risk, not all will pan out as expected. Rather than concentrating the risk, women spread it out, reducing the risk.
  3. Women do their homework. Women are more likely to debate the pros and cons, read articles and ask for more than one opinion before making a decision. By the time they are equipped to act, they have a robust idea of what they’re after. They are also not shy to ask a lot of questions.
  4. Women realise they are not in control. Much as women are quite level-headed and believe they are right most of the time (ok, all of the time), they realise they cannot affect the outcome and are prepared to sit back and let things develop on their own. Good things come to those who avoid vanilla cream cheese frosted Cinnabons…
  5. Women don’t buy and sell as often. Time is your friend, impulse is your enemy. Women are less likely to make short-term deviations and would rather sit tight and hold fire before making a change. Unless we’re talking about geometric print shoes bought before the sale, returned and bought again while on sale. The same pair. In three different shades.
  6. Women focus on longer term, non-monetary goals. They tend to view the bigger picture and reflect on how this will get them to where they want to be in 12 months, three years or 10 years. They consider the impact on family, career and lifestyle, and are willing to make sacrifices today in order to live the dream tomorrow.
  7. Men don’t stop to ask for directions. Once they’ve set course there is no turning back, slowing down, or side tracking. They want to get from A to B, not via the scenic route, and nobody is going to tell them how to get there. Women tend to be more flexible, enjoy the journey as part of the destination and are comfortable to ask for help. Or admit when they don’t have sufficient knowledge on the subject at hand.
  8. Women take more time to make decisions. They may come across as impulsive or governed by emotions, but before they act, they’ve typically been mulling it over and have deliberated several options. The trick is to appear spontaneous yet delay a decision until confident in making the right call.
  9. Women perceive risk differently. It’s not about making a quick buck, the excitement of knowing the odds are against you, or the determination to win at all costs. Women are aware of the potential loss rather than its gain, and realise that often boring and repetitive tasks will achieve the desired result even if it’s less sexy. They focus on calculated risk knowing that profit will come as its afterthought. ‘Honey how about that holiday to Paris? How about now? Oh ok, and now?’
  10. Women have an eye for beauty. Ok, sometimes this one works against them (it’s the best looking Vidae Barista who’s more likely to be a psychopath). But they are often content to trust their instincts and blessed with a more natural common sense. Having an eye for detail also means they can spot the devil first!

The funny thing about investing is that you can’t achieve inflation-beating returns without some level of risk, and need to be prepared to stay the course when the going gets tough but you’re out of Tuffy bags. The best thing an investor can do is remain unemotive and learn to discern between drama and facts. I have to insert a disclaimer here that (besides for my mama who invested in me) the best investors I know are my phenomenally intelligent and talented male colleagues!

Esti Woznica
Esti is head of employee benefits at Octagon Financial. A fulltime working mom of four cheeky chums, she advocates planning ahead and making your money do the hard work. She thinks in lists, enjoys historical novels, Irish whiskey, dancing and Moroccan cooking.

Motto of the moment:
“Be like a postage stamp. Stick to one thing until you get there.”