Today's NYT : Why women are often better investors

[kevink]

Fun piece in today's NYT that includes a couple of choice quotes from William Bernstein:

"Why do men trade too much? Professors Barber and Odean chalked it up to overconfidence. And where does overconfidence come from? William J. Bernstein, a neurologist who turned his attention to investing years ago, points to testosterone.

The hormone causes three problems for investors: It decreases fear, increases greed and very much contributes to overconfidence. “It does wonderful things for muscle mass and reflex time but doesn’t do much for judgment,” he said.

f you fear too little, you’re more likely to get hit hard when markets fall, since you’ll have too much money in the wrong kinds of investments. Similarly, too much greed can lead to too much risk. As for overconfidence, Mr. Bernstein, who is the author of books, including “The Investor’s Manifesto,” suggests a self-administered test question: How certain am I of what I’m doing? “In finance, if you’re certain of anything, you’re out of your mind,” he said."

Anyway, it's a well-written with some sage advice and good humor.

https://www.nytimes.com/2021/10/29/your-money/women-investing-stocks.html

 

[Amethyst]

Attributing matters non-reproductive to sex hormones, always leads to overgeneralization.

 

[Koolau]

Attributing matters non-reproductive to sex hormones, always leads to overgeneralization.

Sounds like typical click bait. "Battle of the Sexes" sells copy (or products) but rarely offers much useful info. YMMV

 

[pacergal]

Of course we are
just kidding.

 

[OldShooter]

I don't think that is new news. I have read other stories about female retail investors generally doing better than males. I don't remember seeing a chemical rationale, just that women are more patient for some reason.

 

[Gumby]

Is it physiological? Cultural? Or something else entirely? I don't know, but I think the ancient Greeks were on to something when they observed that Hubris begets Nemesis.

 

[brett]

I have no idea.

What I do know is this. My spouse had taken no interest in our investing over the years. And still does not.

Notwithstanding this, when asked, she has given me very prudent advice a number of times. Taking this advice has substantially increased our equity.

On at least two occasions during downturns when I considered selling some equities her strong advice was to hold. And to increase our equity percentage when prices were low. I followed this advice and we were much the better for it.

On another occasion her opinion was to start exercising stock options to realize the monies that were on the table. Six months later our FA advised the same for the remaining options. As it turned out both were spot on.

I do not know if he advice is attributable to common sense, being somewhat shrewd, or because she is detached from most of the investment decisions. Whatever it is listening to her occasional investment advice and reasoning has always worked for us.

 

[reneeh63]

Sure, this just substantiates earlier research. Of course women aren't intrinsically better investors - and trading less often doesn't have to be due specifically to "caution" to be effective. Just limiting trades to reduce expenses and taxes is of some benefit. Best of all is to have an AA strategy and simply sticking to it rather than getting "bored" and fltting to new investments all the time.

Yeah, maybe men just crave action/excitement and women prefer one-and-done?

 

[reneeh63]

Attributing matters non-reproductive to sex hormones, always leads to overgeneralization.

Actually, the article doesn't attribute it to "hormones". Just because women do some action doesn't mean it is related directly in any appreciable degree to their hormones but to their entire being in terms of nature and nurture - so genetics, heredity, upbringing, culture, etc.

Hormones are but a small piece of women's behavior....kind of like testosterone doesn't directly impact every thought, emotion, or action of men's. Oh, maybe that's why men think women operate in the same way as them?

 

[Chuckanut]

 

[aja8888]

*subscribed*

 

[marko]

Is it physiological? Cultural? Or something else entirely? I don't know, but I think the ancient Greeks were on to something when they observed that Hubris begets Nemesis.

What I learned in 6th grade. Girls are smarter than boys! just kidding.

 

[Spanky]

My take away is that the buy-and-hold method produces a slightly higher return than active trading or management over the long term because of trading fee.

 

[Sunset]

What I learned in 6th grade. Girls are smarter than boys! just kidding.

Actually it's pretty accurate to say girls mature earlier than boys, which makes them do better in 6th grade.
So they would seem to be smarter.

It lasts right to College admissions, boys do catch up a few years later, but for some the education chances have diminished due to choice made.

 

[Sunset]

I don't think that is new news. I have read other stories about female retail investors generally doing better than males. I don't remember seeing a chemical rationale, just that women are more patient for some reason.

From all that practice of waiting for the guy to phone them for a date

 

[aja8888]

From all that practice of waiting for the guy to phone them for a date

After a few years of watching my friend's three teenage daughters grow into "dating", the game is played differently these days. And I can't even explain it!

 

[Sunset]

After a few years of watching my friend's three teenage daughters grow into "dating", the game is played differently these days. And I can't even explain it!

I was always lousy at the old game, mostly because I dreaded making phone calls

Thankfully my friend asked me if I wanted to come to dinner, now she is my DW.

 

[Bryan Barnfellow]

What I learned in 6th grade. Girls are smarter than boys! just kidding.

Kid you might, but back in the 2000s the admissions dean of the highly ranked liberal arts college that I worked for told me that if he only went by test scores, high school record, academic preparedness, and his past observations, the college would be 100% women. It was the desire for gender balance that brought about affirmative action for the testosterone crowd.

 

[aja8888]

Kid you might, but back in the 2000s the admissions dean of the highly ranked liberal arts college that I worked for told me that if he only went by test scores, high school record, academic preparedness, and his past observations, the college would be 100% women. It was the desire for gender balance that brought about affirmative action for the testosterone crowd.

Yeah, us guys were accepted because they needed height on the basketball team.

 

[Amethyst]

What a myth. Ever hear of flirting? We size you up and pick you out of the lineup, same as you do with us lol

From all that practice of waiting for the guy to phone them for a date

 

[aja8888]

What a myth. Ever hear of flirting? We size you up and pick you out of the lineup, same as you do with us lol

It's all done electronically now with Instagram, FB, etc.