“My portfolio is beating the market this year!”

 

“Tell me a sexy investment idea.”

 

“You need to get in the game now or you will miss this rally.”

 

As a gal working in finance, I forget sometimes how male-oriented the investment language can be. Investing is often made out to be an activity about outsmarting others, and it’s the sense of competition that motivates a lot of men to invest. But what motivates women to invest?

 

 

In today’s post-feminist society, women are often urged to step up, lean in, voice out and come head to head with men in the race for money and power. Women are always feeling the pressure to think and talk more like men, and it’s our own lack of initiative if we are excluded from a dialogue. When discussing investments and the financial markets, men express their opinions on the economy and politics, but many women shy away because they don’t feel knowledgeable enough. But the truth is, no one can know it all in today’s explosion of information, and as the saying goes, “a little knowledge is a dangerous thing.” When it comes to investing, many women prefer to take a different approach.

 

In the sample of clients I’ve dealt with as a wealth management professional, women investors are less concerned about placing a bet on their personal beliefs and beating the market, and more focused on reaching financial goals consistently and preserving family wealth. Women also tend to request more information, spend more time collecting data, before making an investment decision. It is not unlike when women make important life decisions, they like to consult their friends, and collect other people’s opinions and experiences, before acting on their choices. While you may often hear men say “be a man and just do it”, in investing this may not be the best course of action. A famous behavioral finance study shows that men trade their portfolio more due to sheer overconfidence and incur higher trading cost, and as a result, underperform women in investment returns. While men act more on impulse, and therefore are more likely affected by ego, greed and fear, women tend to be more self-aware on their limitation of knowledge and spend more time and effort researching. To conclude, women prefer to adopt a more long-term, disciplined and data-driven approach to investing.

 

 

More and more women are realizing that the #LeanIn rhetoric is about pushing women to operate more like men, rather than empowering women for who they are. So in investing, let women be women, they’re found to be better investors anyway.

 

Happy International Woman’s Day.

 

AQUMON is a goal-based, data-driven AI investment tool that empowers both women and men to make better investment decisions.

 

 

Learn more in AQUMON APP

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