This summer, a study by Lincoln Financial Group reported yet more dismaying findings on women retirees, saying that their investment decisions are more affected by emotion than their male counterparts and that they’re less involved in the financial decision-making. The study goes on to report that while 90 percent of men are influenced by hard facts, only 82 percent of women are. That’s fairly damning to the fairer sex, however…
A new study conducted by Rothstein Kass, found that hedge funds led by women (the hedge fund industry is heavily male dominated) outperformed the global hedge fund index last year – by a long shot. Many studies and surveys have shown women to be more risk-averse than men, which may just give female hedge fund managers an edge at managing risk in a turbulent market.
In fact, the American Institute of CPAs’s released research supporting the idea that women may have the advantage when planning a portfolio’s long-term performance, though the danger is that they would be excessively careful. In LouAnn Lofton’s recent book Warren Buffett Invests Like a Girl – And Why You Should, Too, she asserts that women’s temperaments help them achieve long-term success in the market because they spend more time researching their investment choices, take less risk, and trade 45 percent less often than men (improving net returns and decreasing transaction costs).
This isn’t to say that women don’t have room for improvement – most studies show that women are less engaged in the management of their retirement plans than men. Those numbers definitely need to be addressed. However, the sheer amount of media haranguing around women’s poor performance in finances is as unmerited as it is unappreciated by the women in question.
While aversion to risk is generally seen as “emotional” in a male-dominated industry, when the market is volatile and your retirement is on the line, you might just want to hand the reins over to the little lady. She may be onto something.
– The Savvy InvestorSources:
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