Investing is often thought of as a man’s domain. It’s not, and because of KiwiSaver more Kiwi women than ever are ‘investors’, whether they realise it or not.
In fact, women often have qualities making them better investors than men. Here are some of them.
Women are often more patient
James Paterson, a wealth adviser at Pie Funds, says women are usually far more patient when it comes to investing.
Research backs this up, with a large study by Fidelity showing men are 35 per cent more likely to make trades than women. Those men who traded made an average of 55 per cent more trades in 2016 than their female counterparts.
Paterson says the more often you trade, the more you can lose, as well as racking up fees and transaction costs in the process. It’s been proven more trading can lead to lower performance, he says.
Women have less bravado
Paterson says the women he meets in the investment world are often more emotionally unattached than men.
“Sometimes men don’t want to admit they’re wrong.”
He believes men are more likely to hold onto losing shares with a ‘she’ll be right’ attitude, believing they’ll make back their losses.
Women tend to follow their intuition more, and are quicker to offload ‘losers’, Paterson says.
“Women view money as a tool that they can use to accomplish their goals, while men tend to view investment as a game to be won,” he says.
One downside, though, is women are often less confident than men about investing, where men are sometimes overconfident, says the Financial Markets Authority.
This can lead to women investing too conservatively, and taking on less risk than they might be able to.
Women tend to save more
Fidelity Investments research shows when comparing annual savings rates, women often save more.
When researchers looked at overseas workplace retirement accounts, women consistently saved a higher percentage of their pay cheques than their male counterparts, at every salary bracket.
Women saved an annual average of 9 per cent, the study showed, compared to men at 8.6 per cent.
And when it comes to New Zealand and KiwiSaver, when women save more for retirement, that means more invested in their KiwiSaver accounts.
Though, because women, on average, earn less than men – and because of leaving the workforce to have children, many also earn for a shorter period than men – a higher percentage invested doesn’t necessary mean more than men in dollar terms.
Women might pick better investments
Fidelity Investments analysis showed that on average, women performed better than men when it came to investing, by 40 basis points, or 0.4 per cent.
This might seem minor, but over a long-term investment, say 40 years, it could have a significant impact.
Published 7 March 2019
James Paterson is the Head of Wealth and an authorised financial adviser at Pie Funds. You can access his disclosure statement free of charge at www.piefunds.co.nz. Pie Funds Management Limited is the issuer of the JUNO KiwiSaver Scheme. You can read our Product Disclosure Statement here. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser. All content is correct at time of publication date.