According to a recent study, it turns out that women investors have a slight edge over men when it comes to long-term performance in investing. This is finding of the Fidelity’s 2021 Women and Investing Study.
Women’s investment returns were 0.4% higher than men’s, on average, according to the published report. Fidelity analyzed the annual performance of 5.2 million customer accounts from January 2011 to December 2020.
According to Lorna Kapusta, the head of women investors and customer engagement ar Fidelity, there are a number of reasons that women tend to ‘broadly’ outperform men.
The first reason is that women trade less. This allows them to endure out market lows and avoid extra fees from frequent trading. Women also tend to invest more consistently, which means that they aren’t trying to time the market. Other research on this topic in last decade has also found that women outperform men for similar reasons.
However, despite this difference in performance, women are less confident than men when it comes to judging their financial prowess. The report from Fidelity, which also surveyed 2,400 American adults, found that only 4 in 10 women are comfortable with their investing knowledge and skills.
“I don’t see this as a women versus men thing. What I really want this to focus on is the myth that women aren’t good investors,” says Kapusta. “Women have self-doubt. But what it shows you is that when they do invest, they are very good at it.”
Kapusta says a big handicap to women from being comfortable with investing is that they believe they need to learn more to make better investments, whereas men are more comfortable jumping in any situation.
“Women still doubt their abilities,” she says.