Blog | Entrepreneurship

8 Advantages That Make Women Great Investors

Learn which natural traits set us apart from the boys when it comes to investing — and how they ultimately benefit our portfolios.

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Some professions are categorized as more male-dominated, such as construction work, car sales, and mechanics. Likewise, others are categorized as more female-dominated, including nursing, teaching and social work. Thankfully, some of these gender stereotypes are falling by the wayside, but there’s still work to be done to dispel these myths.

Now, when it comes to the profession of investing, some people might automatically assume that it falls under the male’s domain — but I’m here to say that’s completely bogus. In fact, I’m going to argue that women bring eight unique advantages to investing that makes them better suited to it than men:

Additionally, you’ll be surprised at how many women have been in your position before. There is a perception that women don’t help other women. Often referred to as the Righteous Woman or Queen Bee mentalities, the misconception that women tend to undermine each other is a false one; instead, these behaviors are triggered in male dominated environments that insinuate women are of little value - thus creating an unnecessarily competitive playing field. By asking one another for help, we eliminate the pride or fear associated with this conditioning and create a new environment of trust among ambitious and successful women.

Adding a little more color to #2 above, women learn well from other women when given the opportunity.

  1. We’re not afraid to say, “I don’t know.”

    Remember back in the old days, when you’d have to stop at a gas station for directions if you were lost? Well, now that we can just Google everything or use GPS, it’s no longer as applicable, but men were notorious for not wanting to admit they needed help reaching a destination.

    Women, on the other hand, are more willing to ask questions and admit when we don’t know or understand something. Sadly, the person who acts like a know-it-all and is more afraid of looking “stupid” than asking a question will never learn or grow. Once you stop learning, what’s left in life? The advantage we women have in being confident enough to say, “I don’t know,” is that it opens up the doors for us to learn so many answers. It pushes you to seek out information, to research things online or attend seminars, and talk to more industry experts.

    I truly believe this is one of the most powerful learning tools we, as women, have. Pretending to know all the answers because you don’t want to look stupid comes from low confidence or low self-esteem. Once you realize that you’re not always the expert over a subject matter, you are empowered to exhaust any and every resource around you - only building a foundation of knowledge for every future endeavor.

    So, ladies, stand up and proudly admit, “I don’t know!” or ask someone to explain something again. You’ll be amazed at how much you’ll learn. Just make sure you always question money advice, so that you can have confidence in the answers you’re given.

  2. We’re willing to ask for help

    Piggybacking on number one above, women are also more willing to ask for help than men.

    If your husband has ever tried to fix a broken faucet or light fixture, you know this is true — he’ll probably do anything possible to avoid admitting defeat and calling a plumber or electrician. The difference is, a woman will trust her instinct and ask for help if she knows something is well outside her wheelhouse.

    That’s not to say that women are afraid to try new things, but we recognize when we’re in over our heads and seek the appropriate assistance. What a great way to save time so you can focus on the things that do require your personal attention.

    When it comes to investing, it’s crucial that you ask for help when you need it — that way, you’ll avoid a rookie mistake or even prevent a small problem from snowballing into a bigger one.

  3. Women will hunt for a bargain

    Let’s face it, we’ve had a lot of experience looking for bargains — from grocery shopping with coupons to clothing children, women know how to snag a deal. This is an important skill for investing, because you’ll want to look for something that is priced below its actual value and buy it.

    I love how the following quote, from Ruth Hayden, a financial educator and author, illustrates this point: “If we women shopped (investments) the way we shopped at Nordstrom’s, we’d be in the money. When stocks are low, it’s like a three-for-one panty sale.”

    So expand your product knowledge from pints of raspberries and designer jeans to particular neighborhoods for rental properties or certain stocks, and you’ll soon be able to spot the good deals as soon as they appear. Once you have some practice, you’ll even learn how to turn a good deal into a great deal.

    My first tip, act fast! Just with any bargain, when it comes to finding the best real estate investment deals, get in early, or come in late. Always keep your finger on the pulse of the market, and be ready to pounce with an offer before your competitor.

  4. Women do their homework

    As a general rule, the fairer sex generally does their homework instead of buying off a “hot tip.”

    In fact, Forbes published an article in early 2021 that outlined the careful but wise nature in which women do their investment research.

    “Studies show that women spend more time researching their investment choices. And while they do take on less risk than men when it comes to investing, that doesn’t mean they’re risk averse. Rather, they’re simply more likely to take on appropriate levels of risk with their investments than men. Both of these findings make for better investing outcomes.”

    When it comes to real estate investing, doing your due diligence can make or break your return on investment (ROI). Don’t forget to do your due diligence on a potential rental you sign on the dotted line.

  5. Women Are Risk Aware - Not Risk Averse

    I’d like to really differentiate between the terms “risk-averse” and “risk aware.” As a result of #4 above, studies show that women are perceived to be more aware of potential risks than men tend to be. Additionally, our risk taking tends to decrease under stress. Now, I’ve heard arguments that the real reason women will not be successful as investors is because they are less willing to take risks. Let’s examine that argument.

    I know for me, whenever I venture into an investment that I feel is a bit more risky or unfamiliar to me, I tend to study it just a little bit more carefully than usual. I do my homework with perhaps a bit more effort before laying out my money. If women truly are risk-averse, then this may lead them to do a little more research on the investments they are pursuing, which leads them to greater success with their investments— as statistics prove.

    But what that means at the end of the day is that we make our final move with an awareness of the risk, instead of an aversion to it.

    Now, the one trap that we women need to watch out for is when our aversion to risk traps us in the analysis phase of a potential opportunity. If “analysis paralysis” happens, then we may end up doing nothing. So, use risk to your advantage, just don’t let it prevent you from moving forward. And here’s a little guide to help you decipher risky vs. safe investments.

  6. Women Have Much Less Ego

    I’m just going to come right out and say it: Women have much less ego when it comes to their investments. My girlfriends who invest tend to be very practical, matter-of-fact and conscious of the return on their investments. It’s no secret that men can tend to display ego or bravado when showing off their investments.

    This goes back to numbers one and two — women aren’t afraid to say, “I don’t know” and we are more willing to ask for help. Women are more likely to ask questions until they fully understand the information, and also tend to be more interested in the goal (making money) than in impressing the people around them.

  7. Women are Nurturers

    When it comes to investing, women tend to nurture their investments. What do I mean? Well, in the most obvious sense as it pertains to real estate, we take care of the properties differently. We fix them up (using amenities to attract the ideal renter happens to be one of my important real estate predictions of 2022), we meet our tenants and develop relationships with them, and we foster community ties.

    Part of the nurturing process involves establishing good relationships with other investors. This network may include business/stock/real estate brokers, finance lenders, investors, members of clubs and organizations, tenants, individuals privy to information on future progress within the city, tax professionals, mentors, etc. The stronger our relationships, the better information we receive, which can be invaluable when building an investment portfolio.

  8. Women Learn Well from Other Women

    We are used to sharing information with other women — we will tell our girlfriends about the best new Pilates instructor in town, where we found a bargain on designer jeans, tips on hair products, and so much more. After all, if one of us finds something that works, we want to share it with our friends! This is one reason female-centric investment clubs are growing in popularity — it’s a great way to get introduced to, or to learn more about, the world of investing. I particularly like the ones that focus on education (a place to learn and study together) versus the resource pooling options, which can lead to disappointment. It’s also a good time to mention the eight online resources for women supporting women that I recently shared.

    The downside of learning from women could be that women may sometimes take information from women who have no experience as gospel, listening to advice because, “she’s my friend.” So, just a friendly reminder to make sure that the women to whom you are talking about investing are like-minded and have similar investing goals — and that they have done or are doing exactly what it is you want to do. Otherwise you may be wasting a lot of your time.

Now that you’ve been made aware of how your natural traits greatly benefit your portfolio, all you have to do is get started. Never let anyone tell you investing is a man’s role — financial freedom is within your reach ladies, and that’s a powerful and freeing position in which to live!

Original publish date: January 10, 2019

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