Saturday, July 7, 2012

Yes, A Woman’s Place is in the Money





Psyfitec writes: The research showing that women are better investors than men has been around for a while.  This is linked to the evidence that women are more risk averse than men – they tend to take less chances in general and with their money in particular.

This leads to a simple idea; that we should encourage more women to get involved in trading, both in the professional world and in the home.  The reasoning is that if women are more cautious, and therefore more successful, investors then their stabilizing influence will lead to a safer and less volatile financial world.  Which is a nice idea, but is probably wrong, although you’ll need balls to admit it.

Sisters of Ambiguity: Probably the best known research showing the impact on trading of heightened female risk aversion is Brad Barber and Terrance Odean’s Boys Will Be Boys which shows men trading 45% more than women and losing nearly a percentage point of gains as a reward for their hairy-chest, beetle-browed old-time macho foolishness.  Odean and Barber posit that the cause of this difference is that age-old behavioral chestnut, overconfidence….

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