How do women invest?

Women in the field of investments are emerging as a significant force, characterized by a caution that often translates into superior results. According to the study Women and Investing: Achieving Lifetime Goals by UBS (2024), their particular approach allows them to achieve higher profits than men.

How women invest around the world

According to the UBS study, one of the distinctive characteristics of women investors is their prudence in taking risks, often motivated by the desire to protect their investments. This caution, however, could limit the potential to achieve long-term goals. Women's financial confidence is closely related to their risk tolerance, which depends on risk perception

However, a study by the Warwick Business School revealed that women have outperformed men in investments by a margin of 1.8% per year. Fidelity, in its 2017 study, also confirmed this trend, highlighting that women outperformed men by 0.4 percentage points on an annual basis.

Why is this? It's not that women have a greater aversion to risk, but they are rather more cautious investors.

Data from Vanguard shows that men make twice as many trades as women, while a study by FinanceBuzz reveals that 60% of men check their portfolios weekly compared to 41% of women. In addition, an analysis of traders conducted by Capital.com highlighted that "women investors use stop-losses more often than men, with 43% of women traders using a stop-loss in more than half of their trades compared to 35% of men". This is another example of how women focus more on risk management than men.

On the other hand, women are less likely to fall into the trap of the disposition effect, that is, the tendency to sell during market downturns.

Social Impact

Not only do women seem to manage risk better, but they are also more inclined to invest sustainably. UBS research has shown that women are more confident when their investments have a positive impact on society.

This social sensitivity could positively influence their investment decisions, leading to better results in the long term.

Conclusions

Although women are often considered more cautious in the field of investments, the data suggests that this caution can be an advantage. With more disciplined risk management, greater attention to long-term value, and a tendency to invest sustainably, women are proving they can achieve very positive results.