Last month, we celebrated Women’s Day in South Africa, and we continue to celebrate women increasingly taking charge of their financial futures. Working with many female clients, I have discovered that women share certain characteristics that make them both savvy savers and intuitive investors. Women wear many hats, and it’s easy for our unconscious biases to prevent us from creating financial freedom for ourselves.
If female investors have any weaknesses, it’s their mistaken belief that they are not good investors, with only one third feeling confident in their ability to make investment decisions. Armed with knowledge, women make informed decisions and become brilliant investors, and this is backed by many a study. Women and men do differ when it comes to investing. Whilst I am sharing my views and talking to the female investor, the below traits are important to all parties when making investment decisions:
- Thoughtfulness, patience and discipline
In my experience, male clients tend to eagerly invest in the latest asset class everyone is talking about, e.g., cryptocurrency, whereas female clients do not typically jump to be a part of the glistening craze. They tend to take their time to explore investment opportunities and stay in their investments longer. This mindset follows an important wealth management principle: Sooner or later, the consensus is always wrong. Investing is boring; it’s about playing the long game. This takes more grit than we like to admit.
- Curiosity and interest
Women tend to be more involved in learning about the “how’s” and “why’s” of investing. They ask the right questions and want to understand the planning, investment selection and management processes to make informed decisions. I encourage them to own their financial planning and investing processes by taking a deep dive into how they want their money to work for them and align with their goals — and their values — as well as what information they’re comfortable sharing (or not) with their partners.
- Trust in people and process
There are various studies conducted on heterosexual couples who have invested their funds independently prior to committing to a relationship. The results highlight the fact that the female partner has typically achieved higher investment returns than her male counterpart. This could be attributable to the female investor not overthinking her strategy after asking the right questions upfront, and her inclination to accept and follow advice once she has established trust in her advisor.
- Openness to advice and collaboration
Women value the power of partnership, and hence I encourage female prospects to be authentic in their initial engagements and to be frank about what they want, to ensure they are building connections of longevity. For instance, are they comfortable talking through their decisions with us, as well as having us work with other professionals in their realm (accountants, attorneys and other advisors)?
Through studies and real-life experience, we can expose the impression that men are better investors than women, with women often being stronger in the investment arena. So next time you’re making an investment decision, consider investing like a woman. It will likely pay off. 😉
