Research Suggests Women Better Investors Than Men
BOSTON (CBS) - No doubt these have been a couple of challenging years for investors. New research indicates women might have fared better than men in these difficult times.
Beth Frazier always had a hunch women make better investors than men.
"We don't have enough time to trade as frequently, so we tend to leave our money in there and it grows over time," she said.
One of the benefits of fewer transactions is fewer fees.
Brad Barber of the University of California-Davis looked into the differences between how women and men invest.
"Men are more prone to over-confidence than women, so they tend to trade more aggressively as a result of that," he explained.
Barber surveyed 35,000 households as part of his research project.
He says overconfidence led men to trade 45-percent more.
"Women are more likely to reflect on the information than men are, and are therefore less likely to act on it in a spontaneous way, said Barber.
Researchers are trying to determine whether women react differently because of biological or cultural reasons.
Either way, there are some lessons to learn from the women who were surveyed.
First, trading less is better.
Second, so-called "hot" investments can be harmful. Don't react to today's buzz or fads. Only rebalance your diversified portfolio annually, bi-annually, or quarterly.
Finally, keep things simple. Generally, a more complex portfolio leads to lower the returns.
