# Do women make better investors than men?



## Brendan Burgess (3 Aug 2002)

Some quotes from an article in today's FT by Deborah Hargreaves

<!--EZCODE QUOTE START--><blockquote>*Quote:*<hr> Research from DAB bank in Germany found that women investing online outperformed men by 9.5% last year. The DAB survey found women's portfolios contained 20% of pooled funds while men bought higher-risk warrants.

"Women invest with their heads and men with testosterone" according to Angela Knight of the Association of Private Client Investment Managers. 

Donna Bradshaw, a financial advisor believes "the impenetrable jargon used in much of the financial services world presents a bigger barrier to women than men. Women are put off by jargon while men are more likely to adopt it… Women think they know less and men that they know more…Men are more bullish, eager to make money…whereas women are interested in handing it on to their children."

Women-only investment clubs get good results<hr></blockquote><!--EZCODE QUOTE END-->


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## ClubMan (5 Aug 2002)

<!--EZCODE BOLD START-->* Women-only investment clubs get good results*<!--EZCODE BOLD END-->

Oh well, that explains that so! :rolleyes


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## tedd (5 Aug 2002)

"Research" based on the results of one year's investment outcomes is fairly dubious. 

If a financial journalist said "Research from DAB bank in Germany found that Broker XX investing online outperformed Broker XY by 9.5% last year", we'd all be tripping over ourselves to say that past performance is no guarantee of future performance!

tedd


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## Brendan Burgess (6 Aug 2002)

Hi tedd

I think that this research is only indicative, not conclusive. (But other research has reached the same conclusions).

I am not sure if the past performance argument applies here. If a category of fund managers outperforms another category over time and if there is an explanation for that outperformance, then it would support the investment style of that category. For example, passively managed investment funds, have outperformed actively managed investment funds and it is reasonable to assume that they will continue to do so.

My understanding is that women trade less often than men and consequently, they can be expected to outperform men.

Brendan


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## Observer (6 Aug 2002)

Two relevant points here:

1st to agree with Brendan; if women do invest and hold rather than turnover stocks frequently, as us testosterone fuelled ones are alleged to do, then, yes, they will on average achieve a higher return.  Basic wisdom from the boss here.

2nd.  I imagine, (all kinds of stereotypes at work here) that women invest in more risk averse stocks.  More blue chip, less TMT, more FTSE, less NASDAQ.  Clearly, in the last year, the more cautious policy will have been far more successful (or far less unsuccessful).  BUT, I would be wary of drawing conclusions from this.


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## tedd (8 Aug 2002)

I think that's the key point, Observer. The DAB women picked less risky investments. Last year that was a good idea. Four years ago, the exact same investments would probably have produced the opposite result as the riskier investments were performing better at that time.

So either women are better at choosing appropriate investments for the economic climate (in which case they are better investors than men) or else women and men have fixed investment "styles" which may do better or worse depending on external economic factors (in which case who's on top will vary from year to year...that can't be a bad thing!).

tedd


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## Thor (13 Aug 2002)

*Hmmn*

Interesting though, does it transfer? Do women chose their long term partners with similar caution, but have affairs with the racier types that they'd never marry?


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