Wednesday , 25 April 2018

Men vs. Women – Investment Behavior

The psychology of investing styles for married men vs. married women is distinctly different as noted by a recent Wall Street Journal article (December 12, 2011). Tell me what you think!

The bottom line Men may think they know what they are doing when it comes to investing, but often don’t! Women may think they don’t know what they are doing, but often do!

The supporting research states:

MEN: Tend to be overconfident trading stocks and bonds more actively because they think they know what the next market movement will be. Less likely to listen to financial advice. Result: Men incur various transaction costs associated with trading, but don’t pick assets any better than women.

WOMEN: Less confident than men about their financial abilities and will switch investments less often. More likely to listen to financial advice. Result: Women generate risk-adjusted returns superior to those of men. See attached image for more on the wide array of emotions that both men and women feel when investing money. Our human behavior actually works against us, especially in volatile times like we are having now.

James Bresnahan

JB Wealth Management, LLC Investment Advisor

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