Wall Street is often thought of as a world dominated by wealthy men in suits. But a new study from Barclays Wealth and Ledbury Research has found that female investors are more likely to make money in the market. Here, a brief guide to the findings:
What exactly did the study find?
That women wring more profit out of the financial markets because they take fewer risks as investors. They tend to buy and hold, and avoid risky, anxiety-producing investments and frequent trading. This more conservative approach pays off in the long run. Relatively speaking, women excel at self-control, the study says. "Call it the Weiner principle: Men self-destruct," says David Weidner at MarketWatch.
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Why do women exhibit such profitable self control?
According to the study, women behave this way because they are less confident about taking risks than men. Or perhaps it's that men are too confident. The women also reported being more prone to stress than their male counterparts; they don't want to engage in the anxieties of on-the-fly trading, another factor that contributes to their more conservative, and ultimately more successful, investment strategies.
Have other studies come to similar conclusions?
Yes. A 2009 study found that female investors made 1 percent more annually. A 2001 study also concluded that women were far more risk-averse and had a different investment psychology than men, but didn't note whether that paid off for them. In 2005, a Merrill Lynch study found that women were better investors than men — but concluded, unlike the latest study, that that was because women are less likely than men to hold on to investments too long. Thirty-five percent of women investors who participated in the 2005 study held on too long, versus 47 percent of their male counterparts.
Is this part of a larger trend?
Some think so. "A new body of evidence is emerging that shows women are better at just about everything," says Weidner. He notes Dan Abrams' new book, Man Down: Proof Beyond a Reasonable Doubt That Women Are Better Cops, Drivers, Gamblers, Spies, World Leaders, Beer Tasters, Hedge Fund Managers, and Just About Everything Else, which claims women are better spies because they're more adept at getting people to speak candidly. And just look at political powerhouses like Hillary Clinton, Elizabeth Warren, and even Sarah Palin. Twenty-four thousand pages of Palin's emails were released last week, and not one of them contained a crotch shot. Still, men have women beat when it comes to "self-destructing because of pride, overconfidence, hubris and ego."
Sources: Barclays Capital and Ledbury Research, Dubai Chronicle, MarketWatch (2), Wall Street Journal
