Whether you’re looking for the next hot hedge fund manager or simply a financial adviser, don’t overlook the “XX” factor. More and more studies are proving that female investors—both amateur and professional—consistently outperform men in good markets and in bad.
Less trading, more profit
A landmark 2001 University of Southern California study tracking online trading activity in 35,000 households found that overactive trading by men reduced their net returns by 2.65 percentage points. The reduction was 1.72 percentage points for women.
Hormonal superiority
A 2009 University of Cambridge study name-checked testosterone as the “molecule of irrational exuberance” that spikes during times of above average profits. Instead of conserving gains, male traders became less rational while reaching for outsized gains.
Focus on fundamentals
A 2009 Vanguard study of2.7 million investors found that number of women who abandoned stocks during the recent financial crisis was 10% less than the number of men.
Higher credibility bar
A 2013 American Economic Association study found that in the finance industry men are evaluated on their potential while women are strictly judged on demonstrated performance.
Wealth preservation
A 2010 iShares survey of Canadian investors found that female investors were more concerned with long-term performance. In the study, 70% of women versus 57% of men said it was very important to preserve their initial investment.