Of all the CEOs in the finance industry, women comprise 13% in these ‘modern times’ that we live in.
But here’s a departure from what is thought of as ‘normal’. Women are better investors. This has been validated by several studies.
Diving Into The Studies
In a study lasting a good three years by the Warwick Business School, it was clearly established that women consistently outperform men at investing by a sizable 1.8 percent which is considered quite a gap in the finance industry.
Let’s put this apparently small percentage into perspective. The total current value of the stock markets is estimated at 95 trillion dollars. So women bring in a clear 1.71 trillion dollars more than men to the table.
The total economy of a highly developed nation such as Spain is 1.45 trillion dollars. This should give you an even clearer view point.
All of this is more a consequence of female investors having a long-term perspective. They also have a very welcome tendency to study the asset in much greater detail before they dive into it.
Men on the other hand have the propensity to pick more speculative stocks in the hope of quicker and weightier returns.
Stock market indices are difficult to beat. In the study we are talking about, men beat the FTSE by an insignificant 0.14% while women were ahead by a good 1.94%.
Men were found to be more inclined towards “lottery style” investments.
Women focus more towards achieving their financial goals, research the background of the assets and are able to set their targets with a clearer mind.
Interestingly mutual funds mainly appoint alpha males for the interaction with customers since the clients have been observed to be biased against women and suffer from the preconceived notion that their money will be safer in the hands of the man they are dealing with.
In another study by the University of California, quite appropriately titled Boys will be Boys, the researchers analysed the behaviour of investors for close to six years.
This comprehensive study found that overconfidence is natural, both among men and women but men are prone to be more overconfident compared with women.
This is an aspect that has been established by psychological research as well. The study also confirms that the finance industry is over represented by men.
Confidence is King
Due to overconfidence both men and women tend to rotate their trades more than they should. At the same time, men have the tendency to trade appreciably more than women. Another result of overconfidence is that such traders tend to overestimate the accuracy of the information they have.
One more striking aspect that the study discovered was that single people, both men and women are inclined to trade more than those who are married or living in a relationship. Makes sense.
Since being in a committed relationship does make people more responsible. The bottom line of the study also includes the fact that women outperform men, consistently.
In spite of facts pointing straight in favour of women, matters are so atrocious that women in the finance industry are viewed as clerks, typists and assistants and many finance managers who are women quietly work behind the scenes.
Many studies have been carried out that point clearly towards the perception that women, by society in general, are seen as inferior.
Surveys and studies openly show that the unfairness begins at the household level and this unfairness gathers bigger proportions at the societal level.
Whether it is studies, matters relating to property or occupation. Not only is all this documented but is plainly seen all around us.
While conditions are improving in some countries such as Norway we are still a long way off from closing the gap in the earnings of women compared to their male counterparts for the same work.
According to some studies, it will take as long as 70 years.
On the positive side while the discrimination is happening all around us it’s the women who go on getting better results out of the investment markets and laugh their way to the banks.
There are issues that face women all over the world. And one company is looking to end one of those issues now.
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