Hell yeah we are!! I loved this photo of the fearless girl facing the wall street bull which was put up this year by State Street Global Advisors to mark International Women’s Day. The statue draw widespread attention. “She’s not defiant, she’s brave, proud and strong, not belligerent,” Kristen Visbal, the statue’s sculptor, told the Associated Press.
Our tackle trading mentors have always stated “Women are way better traders than men” the first time I heard this statement as a new trader I was surprised. At first, I thought they are just saying this to encourage women and because they are really nice guys, which they are, until I saw other publicans on the topic and it all made sense.
According to an article from CNN “Fresh evidence: women are better investors than men” by Heather Long; Women are better investors than men, based on a growing body of evidence.
- The big investment firm Fidelity says that female investors outperformed males last year by 0.3%. In fact, Fidelity found that females outdid men in the past decade.
- Data from Openfolio, an investment tracking app, also found the same trend. Women have topped men every year for the past three years since Openfolio began tracking results.
Based on the research on the topic: Boys will be Boys: Gender, overconfidence, and Commons Stock investment by economists Terrence Odean and Brad M. Barber, Psychological research demonstrates that, in areas such as Finance, men are more overconfident than women thus overconfidence leads to fewer returns.
“Odean  points out that overconfidence may result from investors overestimating the precision of their private signals or, alternatively, overestimating their abilities to correctly interpret public signals. Investors also hold riskier portfolios than do rational investors with the same degree of risk aversion [Odean 1998].”
This does not, however, mean women lack confidence. It means we are more likely to be thoughtful about our actions. Other qualities that make women better traders than men are;
- Men let their egos get in the way thus they become overconfidence
- Women accept when they are wrong, men hate to be wrong – I love the commercial of Tarzan and Jane, where Tarzan refuses to ask for directions when it’s clear they are lost in the forest… Needless to say Jane is not happy and a happy wife is a happy home… lol
- Women are likely to seek help and advice from others to improve their trading
- Women are more disciplined and less likely to panic
- Women take calculated risks as opposed to jumping head first – Risk management is critical in trading, one can argue it can make or break your portfolio.
- Women are better at specific goal-setting, following direction and sticking to the plan which is key especially in options trading – stick to the plan and KISS (keep it Simple Stupid).
Although women are better traders than men, we are still largely underrepresented in the financial sector because we are often fearful of the stock market but that has to stop. We need to empower each other as women to be financially savvy by taking control of our finances. To those women who are already in the game we would love to share your trading journey with the community or any other subject you want to share about trading via a blog. For those who are new, if you are ready to start your trading journey please feel free to reach out to us by leaving a comment on this post. We would love to go on this journey with you.
To all the men, encourage the women in your lives (wife, daughters, sisters, friends, mothers) to take control of their finances by getting in the game and instead of doing it for them, do it with them.