Despite the fact that women earn 5% less on average than men who are in the same positions, women are great at investing — and they can offer a lot to learn about. Here are a few key lessons men can learn.
Live modestly and invest extra money
Always do your research
When choosing investments women ask more questions than men do.
In addition, women tend to have more balanced investment portfolios than men. As a consequence, women are better protected from losses during periods of volatility. But the thing is not that women are afraid of the risks. They make the most favorable decisions for themselves, so when compared to men, they receive the same profit (or more) at a lower level of risk.
Find investments you can buy and hold
Patience is the key to successful investing. Choosing the right stocks will help ensure a stable return and increase the value of the portfolio. However, men are less likely to choose the long-term approach and frequently sell assets, following the current market trends. This risky approach may misfire.
Short-sighted investors suffer losses when the market goes down. Because women trade less often than men, they are less likely to make the mistake of buying or selling improperly resulting in losing money. In addition, more transactions — more fees.
According to Vanguard, 11% of men and 7% of women exchanged mutual funds in their accounts in 2014. Additional data show that between 1991 and 1997, male trafficking was 45% higher than that of women. Because of this, the net income of men declined by 2.65% per year, with an average of 1.72% for women.
Are in doubt? Ask for help
According to Fidelity, women are more likely to ask professional financial advisers for advice than men, which can play a key role in developing an investment strategy. Statistics show that 42% of women trust their retirement accounts to financial managers – just 36% of men do the same. And although professional services also need to be paid, profits and the overall value of the portfolio pay off all costs.
Although women obviously have a talent for investing, as they get older, they increasingly experience difficulties. This is mainly due to the fact that women live longer than men and therefore need money on pension.
Sooner or later about 90% of women face the need to manage their finances on their own, so they need to think in advance about old age and the costs they are facing.
In addition, although women are good at balancing portfolios, they may need to invest more aggressively in their youth to make up for lower salaries.
Women who go on maternity leave may consider retiring later. This will help them save additional funds, longer spend their retirement savings, and increase social benefits. Time will pass and all this will play its part.