Recent research from Hargreaves Lansdown shows that women have generated an estimated annual return nearly 15% higher than their male peers over the five years to 30th Sept 2019. Women are also less likely to lose money on their investments than men.
So why is this? My experience largely mirrors Hargreaves Lansdown’s research.
HIGHER RISK DOESNT ALWAYS MEAN HIGHER REWARD
Women are much less likely to suffer large losses. That’s because men are far more “gung ho” and can’t resist speculative high risk investments. When one or two come off they get even more ambitious until one large loss wipes out all the gains.
WOMEN FOLLOW THE RULES
Women are better at taking a long-term view and sticking to their chosen investment strategy. They are also more likely to have a robust monitoring process in place, which they stick with.
WOMEN ARE FAR LESS LIKELY TO OVER-TRADE
Charges cannot be totally avoided but they should be minimised where possible. Men are more likely to tinker with their investments – buying and selling more frequently – which can cause charges to really stack up.
WOMEN DON’T TRY TO BE TOO CLEVER
Men can’t resist trying to be too clever – trading on the back of what seems to be good or bad news in the hope of beating the market. That’s a strategy which rarely produces good returns. The “buy and hold” strategy followed by most women is almost always the winner.
WOMEN KNOW THEY HAVE TO MAKE THEIR MONEY WORK HARD
All the evidence is that because of the pay gap, family responsibilities etc., women’s accumulated pension funds lag well behind their male peers. Most women are fully aware of this and therefore take saving and investment very seriously once they have some spare money.
Whether we are male or female, the above are basic investment rules which are vitally important. Just because the evidence is that females are better at following those rules doesn’t mean we couldn’t all do better.
Most of my clients find that the Hargreaves Lansdown platform is a very user friendly and cost effective way of holding, managing and monitoring their pensions/investments. If you would like to know more, send me an email or text me, Richard, on 07770 575122 and let’s have a no obligation/no cost chat.
I am not now a regulated financial adviser and cannot recommend/sell specific investment products but I can provide some very useful guidance, information and coaching based on my 30 years plus financial planning experience.
If you would like to know more about the fundamental investment rules, how to apply them and how to monitor results now is the time to get in touch.
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