As with most things political, there are the talkers and the do-ers. Those who talk about promoting women’s rights, and those who actually do it. I’d like to thank the women who stepped up when I asked for help in supporting a woman owned business. It astonishes me how many yap-yap about promoting women (as if they’ve just discovered it) and those who actually go on and do it with money or meetings. There are many women, happy to stand on the shoulders of others, but raise them – just like men too!
Following on from last week’s article about women investors, I wanted to add notes from a trip to Singapore.
I was struck by how many are women entrepreneurs in a room in which I’ve delivered a speech. Far more than I would have found in the UK. A room with about a thousand entrepreneurs and about forty percent were women.
There can be little doubt about male dominance when only one out of a hundred of the UK’s largest companies are headed by a woman. Even in the US, it’s a similar proportion of women who head Fortune 500 companies.
How ironic. Research shows 46 per cent of all US businesses are owned by women, and employment at women-owned businesses is growing at 18 per cent, compared with 8 per cent for all companies, according to business magazine Forbes.
And when it comes to investment, research also shows women make better investors than men. Women’s portfolio’s earned 1.4% annually more than men’s did in a study of over 35,000 investors by the University of California at Davis. Indeed single women earned 2.3% annually more than single men.
Poor male performance is due to over-trading according to the study. Men trade their accounts 45% more often than women. And single men shuffle their holdings 67% more than single women. Perhaps the adage about men’s fear of commitment is true after all.
A National Association of Investors Corporation ten-year study found all-female investment clubs outpaced all-male investment clubs by producing 23.8% average compounded lifetime annual returns compared to 19.2% for male clubs.
So what lessons are there for men? After all, as a sex, we men are always ready and willing to learn from women, aren’t we? Do not male drivers at the first opportunity admit they are lost and ask passers-by for help?
First, save transaction costs by not churning your portfolio. Second, men should spend more time researching before investing. Fear of making a mistake was 50% to 60% higher among women than among males according to the US National Center for Women & Retirement Research. Consequently, women spend 40% more time than men researching and are also less likely to trade on a ‘hot tip’.
Third men need to reign in their overconfidence. 52% of men express confidence in their ability to invest wisely, compared to just 38% of women according to the American Savings Economic Council. Men are overconfident in their abilities to pick market beating stocks.
This in turn often makes women better traders – more risk averse, awaiting clearer market signals for good trading opportunities and more diversified.
So what do women need? A little more confidence to start investing, but not so much as to make them bad investors, appears to be the difficult resolution.
