A new Kiplinger investigation has discovered that women investors are better than their male counterparts for a variety of reasons, primarily because they do more research and they panic less.
As part of Kiplinger’s special report,
the magazine asked a group of accomplished women on Wall Street to share their investing advice.
The group offers seven tips:
- invest in what you know,
- temper risk,
- think long term,
- trade sparingly,
- sell with discipline,
- rehearse your script
- and work with a team.
Further, the magazine partnered with InvestmentNews to survey Kiplinger’s readers via email. More than 1,500 surveys were completed, almost evenly divided between men (53%) and women (47%).
- Nearly 90% of respondents said they primarily learn about personal finance from financial publications and websites.
- Women are more likely than men to ask questions of a financial adviser (26% to 20%) or talk to friends and family (10% to 4%), and men are more likely to watch financial news on TV (27% to 20%),
- Men were more likely than women to say they have an above-average risk tolerance (39% to 29%). But among unmarried women with a high net worth ($750,000 or more in investible assets), a larger percentage—41%—said their risk tolerance is above average.
- Women were more likely than men to say their number-one personal financial goal is to “retire with financial security and peace of mind” (52% versus 45%). Men are more interested than women in leaving a legacy for future generations (15% versus 8%).
- Among women, 39% currently use a financial adviser, compared with 35% of men. And women are more likely than men to value the adviser’s services in planning retirement income (64% versus 59%).
Additionally, 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 down year for markets, women lost an average of 2.5%, compared with a loss of 3.8% for men. In both years, women achieved their results with smaller swings than men experienced.
Overall, discipline is the key. “Great investors are disciplined about the price they’ll pay when they buy and will buy even if the world is falling apart around them,” says Ann Kaplan, a former Goldman Sachs partner who is now a partner at Circle Wealth Management, an advisory firm with offices in the New York City area. “They’re the same way when they sell. Even if the markets are frothy and could continue to go up, once a stock hits the point where it’s overvalued, you should have the discipline to sell it.”
Meanwhile, studies show that male investors save aggressively—both inside and outside of retirement plans—and are better than women at running the numbers to ensure that they’re on track to a comfortable retirement. “These factors, coupled with women’s lower average wages and greater longevity, go a long way toward explaining why men’s poverty rate in retirement is half the poverty rate of women,” Kiplinger reported.
“My real concern is that the retirement-savings crisis is a gender crisis, and we are not talking about it that way,” says Sallie Krawcheck, the former head of Bank of America’s Merrill Lynch division and chairperson of Ellevate Network, a financial networking group for women, and co-founder of Ellevest, an investing platform for women that is due to launch this year.
“Women can save more and invest more. They have to find a way that works for them and just do it.”
But the Daily Republic
recently touted one investing attribute which should be embraced by both sexes: Skepticism is the key element of sound investment strategy, the Daily Republic reported.
"The lesson is to be skeptical. Special deals often carry other unwanted elements or baggage. Investigate before you invest. If in doubt, seek professional help," explained Mark Sievers, president of Epsilon Financial Group, is a certified financial planner with a master’s in business administration from the University of California, Berkeley.
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