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Invest Like a Girl

Well before CNBC was even a glimmer in a network executive’s eye, my grandfather had the TV tuned to some program that had the electronic “ticker tape” scrolling all day. At 12 years old, I’d never seen anything like that. Nor did I want to.

To say he was an attentive investor is an understatement.

When he passed away, my grandmother worked with a financial advisor. Grandma never had a paying job, and I never heard her discuss Money once while Grandpa was alive.

Fast-forward just a few years, and her advisor told me that my grandmother knew every stock and fund in the portfolio and why they were there.

Once I got into the business, we’d have long talks about the economy, the markets and individual stocks. In fact, that’s what I miss most about her – not the spoiling me rotten and the unconditional love (well, those too), but having those adult-level conversations with her and realizing just how wise she was.

She was hardly alone in her investing prowess.

According to a study of 5 million accounts, women’s investing results outperformed men’s by 0.4% per year. The two main reasons cited for the men’s underperformance were overconfidence and overtrading.

In other words, men bought and sold too often. In fact, men traded 45% more than women.

A 2001 study of 37,000 accounts showed that women also had more discipline and were smarter risk-takers.

It is expected that by 2030, American women will control much of the $30 trillion in financial assets that baby boomers possess. And they are expected to inherit another $29 trillion over the next 40 years.

Women currently control 51% of the wealth in the United States, which is a positive given that they’re the better investors.

More money being invested wisely is better for everyone as a whole.

If you have a wife, daughter or granddaughter who is not especially interested in the markets, do your best to get them involved. They don’t have to manage the money on their own. There are plenty of honest financial advisors who can help them.

But the earlier they have an understanding of how markets work, the better off they’ll be if they ever need to take charge of their own funds or their family’s funds.

For those of you who want to improve your results, here are a few things you can do to invest like a girl:

  • Don’t trade too much. I know, that’s strong advice from someone who runs trading services. But most people can’t tolerate the risk that comes with active day trading, and a scared trader loses money. Buy stocks of quality companies like Perpetual Dividend Raisers (companies that raise their dividends every year) and sit with them for the long term.
  • Manage your risk. Women are better at avoiding mistakes – whether it’s something stupid like walking on a mostly frozen pond (which I did while my then-girlfriend, now-wife pleaded with me to get off the ice) or buying a crypto they don’t understand instead of an index fund (which I did not do). If you do decide to trade, use trailing stops, position size accordingly and don’t chase the fast money. That way, no loss can cripple your account.
  • Save and invest. Despite earning an average of 18% less than men, women save almost 5% more of their income than the dudes. For your account to grow, you need to keep feeding the beast. Yes, its value should naturally go up as the market rises over the long term, but by adding funds on a regular basis, you will grow that nest egg much faster than you would by making only a one-time or occasional investment.

Men and women each have their own strengths. And guys… it’s time we recognize that when it comes to investing, we might be able to learn something from the ladies.

The post Invest Like a Girl appeared first on Wealthy Retirement.



This post first appeared on Wealthy Retirement, please read the originial post: here

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