The Secrets of Women Investors

For starters, they do more research and they panic less. And guess what—they get better results.

 

- Kathy Kristof

WOMEN USED TO GET A BAD RAP on Wall Street. Industry observers maintained that women started too late, saved too little and invested too conservatively. But research is increasingly proving otherwise. Just as Little League pitching phenom Mo’ne Davis turned the phrase “you throw like a girl” into a compliment, author LouAnn Lofton says you should be flattered if someone says you invest like a  girl. After all, says Lofton, who wrote Warren Buffett Invests Like a Girl, the nation’s best known investor does.

A raft of surveys indicate that women do more research, are better at matching their investments to their goals, trade less and remain calmer during  market upheavals. If you’re unsettled by his year’s stock market swoon, you may be interested to know that, on average, the portfolios of female investors hold up better than those  of their male counterparts during a downturn. An analysis of the 60,000 users of Openfolio, an online investment-sharing platform, found that in 2014, a stellar year for the markets, the women investors it tracks outpaced their male peers by an average of 0.4 percentage point. In 2015, a poor year for markets, women lost an average of 2.5%, compared with a loss of 3.8% for men. In both years, women on average achieved their results with smaller swings than men had, adding luster to their already impressive achievements.

Of course, men can be marvelous investors, too, and in some areas women would be wise to take their counsel (see the box on page 49). But women have a different and valuable approach that can help almost anyone become a better investor.