Why Women Make Great Investors

There can be nothing more powerful and graceful than a woman. Women add life to our lives, making every waking moment with them a roller-coaster experience. Today on International Women’s Day, you will be happy to hear that women make better investment decisions than men. It’s not I who says this; it’s the Sachin Tendulkar of investing — Warren Buffett. Warren Buffett claims he “Invests like a girl!”. There is in fact a book named “Warren Buffett Invests like a Girl”.

Better Psychology

Buffett says women are natural investors. Think about it, you may get what he says. Women have a natural tendency towards commitment and long-term relationships. They do not look for short term gratification like many men do. This personality trait bodes well for women as long term investors. Investors who have been successful in the past have made money holding on to their investments over a longish period of time. During this period, they would have had a love-hate relationships with their investments making them harder to hold on. As in any relationship, investments need conviction and trust to become successful for you. On the other hand, men are more instinctive and look for instant gratification. They lack trust and their convictions can be broken relatively easily.

Better Biology

Women have favourable biology to invest. They have the right blend of aggression (a bit of testosterone) and the “calming” hormone progesterone to balance between greed and fear. As we have already greed and fear can be used to make a lot of money. Women have the tendency to filter out noise and focus on the real deal. This is indeed a virtue and I wish I had this as a man. Men are more aggressive and panic quickly in dire situations in comparison.  They will sell fear and buy greed which is a terrible investment philosophy. The only advantage men have is that they are a bit bolder getting into an investment than women.

Indian Women Understand Value

This is a no-brainer as far as I am concerned.  Indian women have the inherent ability to see where there is value and where there is none. They don’t make hasty decisions whether while buying groceries or a dream house. Both decisions are made with the same philosophy, bargain and squeeze out the best value. My wife is much better than me in negotiations and my mother scores over my dad for holding on to investments for longer time frames. Both add value in their own sweet ways. So, next time your wife advises you, pay attention. She could be on to something that can change your lives.

Evolutionary Advantage

We were all hunters and gatherers at some point in time, thousands of years ago. Women had multiple roles, from hunting, distributing and hoarding food. It’s in their genetics to optimise any set-up and be more organised. Investment needs these qualities to be successful in the long term. The organised and structured approach of women can do wonders to a fund handled by a woman. Nature has already given them the framework to handle money better, why not we make use of it?

Born Leaders

Women are born leaders. There is no doubt about this. It’s just not in the field of wealth creation alone. They would make better business leaders and CEOs. They can multi task at the same time be focussed on the longer term vision. It is imperative, we tap the true potential of every girl and woman in India. If you are a man reading this, the best thing you can do is not interfere in your partner’s progress. She probably has more potential than you, there should be no problem in accepting this. After all it’s a partnership.

Conclusion

Women make excellent decisions in life most of the time. So it’s time we also listen to them on how to make money and create wealth. Type casting that wealth is a man’s thing is regressive and detrimental to the field of finance. We as a society should think deeply about this and make every woman around us count. Happy Women’s Day!

Arjun Balakrishnan is an investment fanatic who loves writing about investment topics. He regularly writes at Investment Gyaan.