This is not an article about gender equality. The title of this blog post is actually a question that many people have been asking for a while now. In fact, so many people want to know the answer that several studies have been carried out in recent years by banks and investment companies, among others, in an attempt to find a definitive conclusion.
The answer would seem to be – yes!
One of the main reasons why this is so has to do with something as basic and primal as hormones.
Women’s lack of testosterone make them more cautious and disciplined investors. For traders, testosterone is a good thing, as it fuels man’s risk-taking tendencies, helping a savvy trader to make a lot of money in a short space of time. But too much risk taking, over a prolonged period of time, can have a negative impact. A woman’s calmer, more thoughtful approach is the way to make money in the long run. And this doesn’t only apply to the stock market.
Female Angels Investors are on the Increase
In 2013, the University of New Hampshire conducted a study that showed that almost 20% of angel investors were women – an increase of over 7% from 2011. Many of the traits that make a good angel investor come naturally to women, and, as the number of female angel investors continues to increase, more funding will be made available for startups, especially those founded by women entrepreneurs.
Women have a knack of choosing companies that have a good chance of success. One theory as to the reason is that women make the majority of household buying decisions. They’ve been exposed to marketing since they first went to the grocery store with their mothers, and have a natural instinct for discerning which are good products or services.
Women are more thoughtful and cautious in their choices than men. They also have no problem admitting they don’t know something, and will conduct research to learn more. Men, eager to appear decisive and dominant to their peers, make hastier, more impulsive investment decisions, which can potentially backfire down the line.
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