Research from Yoppie has found that when it comes to long-term investment, women are more likely to see a greater return than their male counterparts.
Investing in property, stocks and shares can be a volatile endeavour but according to investor and business tycoon, Warren Buffet, investors should expect to average a 7% return on an annual basis.
However, a range of sources from Forbes, to the University of California and Hargreaves Lansdown, have shown that women outperform men seeing greater returns from anywhere between 0.4% and 1.2% a year.
Based on these sources, Yoppie found that this average overperformance for women investors sits at an average of 0.8% a year.
To put this into the perspective of actual monetary returns, if the average male and female investor were given £10,000 it means that a 7% increase for the average male would see a return of £10,700 after the first year, while the average female investor’s return would sit at £10,780.
When viewed over a period of 30 years, the difference becomes far more significant, with the average female investor seeing a return of £95,184 – 25% more than the £76,123 seen by the average male investor.
So, what is it that makes women better investors according to Yoppie?
This has been largely attributed to a few qualities, the first of which being that they tend to plan in a different manner to men.
Female investors build financial plans based on their life goals with their family at the forefront. In contrast, male investors are more likely to focus more on investment performance.
So, while male investors make more knee-jerk decisions during fluctuating market conditions, women are more conservative and hold onto their stocks for longer.
Lower appetite for risk
Women investors tend to opt for diversification over high-risk investments.
They will often allocate their investments based more on the life stage at which they’re at and overall, which allows them to take a more appropriate level of risk when compared to men.
Women demonstrate a far greater level of patience when investing compared to men and research has shown that men are 35% more likely to make trades.
However, this patience can often pay off in the long-term for female investors and provides a more consistent rate of return.
Research and guidance
Finally, women are more open to help from external sources. Female investors spend far more time researching their choice of investment and are thought to be twice as likely to seek external help from a financial professional.
Daniella Peri, founder of Yoppie, comments: “When it comes to investing there’s no real right or wrong approach but a number of studies have found that many of the traits and approaches shown by women pay off in the long-term.”
“My own personal experience of working with women investors has been an incredibly positive one and I think without the chance to do so, it would have been far harder to gain the investment I needed in order to get Yoppie off the ground.”
She adds: “In my experience, male investors are very black and white with the sole focus being on the figures and the potential returns and timescales. Female investors, however, tend to consider the broader picture of what we do, why we’ve launched our product line and how this impacts the life of the modern-day women.”
“No one approach is ‘the right one’, but this investor diversity does spill over into the companies they back, meaning that more founders like myself get the chance they need and that they might otherwise have struggled to find,” she concludes.
Recently, Property Investor Today ran a series of stories focused on female investors in light of International Women’s Day. You can view the last instalment here.