Women in Wealth | Why Women Tend To Out-Perform Men in the Financial Markets

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®

In honor of Mother’s Day, Jonathan discusses women and their role in investing in our culture. He also explains how patience in current market conditions will lead to investor success over the long term.

Good afternoon. This is Jonathan Satovsky of Satovsky Asset Management. May 2019 with a video blog update.

In honor of May and Mother’s day, I wanted to talk about women and their role in investing in our culture.

Got me thinking because yesterday my family and I saw a play called, “What a Constitution means to me”.

That talked about women over the last several centuries and the history in our culture, both from the Constitution and evolution of amendments that have continued to this day and into the future.

So, in doing a little research about women in investing, I came across a study by university professors, Terrence Odean and Brad Barber who conducted a seminal piece of research on this phenomenon that women did outperform men over 35,000 brokerage accounts that they analyzed.

In fact, in a similar study, Fidelity analyzed over 8 million client accounts and found women outperforming men.

Barclays sponsored Warwick Business School study found out-performance, and Finnish investors did a study citing evidence that females are superior traders.

So why is this?

Well, according to Merrill Lynch and age wave reports found that 52% of women are confident about their investing acumen while 68% of men are confident about their investing acumen.

That confidence leads to over confidence where men end up taking more risk and trading more frequently and thereby leading to lower returns, while women tend to be a little bit more passive and buy-and-hold for a longer period of time.

Now let’s relate to today. Today, Monday in the middle of May, there’s been conversations about trade wars between the U.S. and China.

And on the news the financial markets in the United States have declined 700 points. Big headline news, likely, that big declines in the financial markets are happening today because of these trade wars.

But let’s pause and take a step back, and instead of being a short-term trader, let’s think about this information.

If the trade wars end up being good, maybe right now it’s not certain, but if they end up being good, it’s very possible that it could unleash tremendous prosperity both in China and the U.S. in a harmonious way.

And if it does not, if the trade negotiations do not go well, then it likely leads to our U.S. Federal Reserve lowering interest rates, loosening money supply to be able to create an offset to tightening conditions due to trade wars to make better conditions for borrowing and lending for businesses and for equity ownership in the United States.

So, either way, patience is a virtue.

So as they say, April showers bring May flowers and with that enjoy the rest of your month, and let’s benefit from mother’s for multiple generations to invest for the long term.

Thank you.

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Video Recorded May 19th, 2019
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Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market indata. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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