Wall Street and India’s own Dalal Street are overshadowed by men. While many assume that men are better wealth managers, new research study proves that it’s just a myth.
As per the report released by Fidelity Investment based on an analysis of 8 million client accounts, women performed better in generating returns. Despite the glorifying results, less than 10% of women believed they would outperform men when it comes to money management.
As per the data, men’s savings rate stands at 8.6% while women save 0.4% more than men. The improved savings rate enables them to earn more annually on their investments by 0.4 percent.
Warren Buffett is the most adorned investor on this planet and his investment philosophy cajoled many investors to adopt the value-investing concept.
So, what makes Warren Buffett the most celebrated investor? The answer lies in the fact that he invests like a woman!
Warren Buffett in his entire career has followed the policy of investing in the sound business with a view of FOREVER. And that’s what distinguishes him from other investors. He doesn’t react to the market frenzy and averts himself from the trading mindset.
There are a host of innate skills which makes women a better investor. From the household purchases to monthly budgeting, women have nailed the art of planning and devising a strategy to optimize the use of money. Here we list clear-cut factors that differentiate women from the men when it comes to investing in the Indian stock market.
Women think long-term
Women are normally long-term investors, they know what they are buying and hence can plan portfolio diversification and allocation much better. Women are generally risk-averse and hence have their money invested in equities, endowment plans, tax-saving instruments such as ELSS and FD’s to ensure that they have a contingency plan in place.
Handle their emotions better
Since women are able to think long-term, this quality comes to great advantage while investing in the Indian stock market. Men have an inclination towards trading and tend to give more attention to day to day fluctuations. They become impatient when the market takes a downturn and may also sell a sound stock in panic. Whereas, women are more patient, acknowledge volatility and think beyond it to generate returns on their long-term investment. This helps them to trade less, stay calm during tumultuous market conditions and hence generate better returns even in times of stock market swoon.
The can conduct rigorous research
Women are more efficient when it comes to matching their investments to their financial goals. Women need every detail before they invest and are willing to dig as much as possible. Perhaps, this aids them in delivering a lustrous accuracy rate.
Even if women are better investors, what makes them submit the investment decisions to their spouses?
Lack of awareness:
This arises due to many factors like poor educational facilities, early marriages, unsupportive family, etc. This makes them nervous or underconfident about investing at the outset but with the right education, they eventually turn out to be better investors. According to the survey conducted by BritainThinks, only 38% of women as against 53% of men revealed that they feel confident while taking investment decisions.
Lack of time:
In Indian society, mostly males assume financial responsibility, whereas females assume domestic work. Women have to face a huge burden of domestic responsibilities as they don the various roles of daughter, mother, wife, sister and daughter-in-law.
The other hindrances include the perception which our patriarchal society holds about women, which may demand more time to change.
P.S: It doesn’t matter if you are a man or a woman, the key to successful investing remains the same:
Invest in high-quality business with a long-term perspective and yes until that time, keep your emotions at bay.