Warren Buffett invests like a girl

It’s time we have some real talk about overcoming performance anxiety. Ahem, no - not that kind - the professional kind. There’s been a long, persistent and, frankly, quite infuriating myth that females make bad leaders/managers/investors, and - you’ve guessed it - it’s all total nonsense. In fact, hedge funds run by women outperformed a broader benchmark of alternative investment managers in the past five years. “The HFRI Women index has returned 4.4 per cent over the past five years, compared with a 4.2 per cent return for the HFRI Fund Weighted Composite index, a broader gauge of hedge funds across all strategies and genders” (from the FT). The fact that women make better leaders is consistently backed by research - both in academic and auditing circles. We suggest you print out these articles, laminate them and keep it in your wallet for future mythbusting purposes.

But, seriously - if research continuously confirms that women are all-around pretty great at doing their job, why is the number of, say, female portfolio managers in hedge funds so low? Is it really all down to our lack of confidence, or is something more systemic at play? Although we can’t eradicate chauvinism (we wish!), we can gain more confidence and conquer performance anxiety. Case in point - women are actually far wiser at investing and retirement planning than they realise. Terrance Odean, a professor at Berkeley who has spent his career studying investor trends, found that men traded 45% more than women in the 1990s - he blames it on overconfidence. However, all that extra trading caused men to have average returns that were a full percentage point lower than women - we’d be lying if we said that doesn’t make us feel ever so slightly smug.

One way to boost confidence is to remember why women make better investors in the first place: we are less likely to engage in risky trading, are far more diligent with our research, make more diversified investments and are humble enough to admit mistakes, which leads to seeking professional advice. A calm, steady and longer term approach is key to successful investing, and women seem to be perfecting the art by the day.

👉 How do you feel about women in leadership roles? Have you ever felt like you just weren’t good enough for a managerial position? Why, or why not? When it comes to investing - do you think you have the confidence to give it a go? We want to hear from you - please get in touch! 👈

 

Credit image: Giphy.