Men tend to be more confident investors, study finds
Men are likely to be more confident investors, but tend to put too much faith in their own expertise and trade too much, a new study has found.
An independent study of up to 2,000 people in the UK, Hong Kong, Taiwan, and Singapore, from behavioural finance experts, Oxford Risk and wealth manager, Investec Wealth & Investment, identified four common types of investors based on financial personality assessments.
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It looked at criteria of confidence; composure in the face of market volatility; willingness to balance financial and ESG outcomes; and the need to invest in familiar assets.
The results found over half (52 per cent) of men are categorised in groups that tend to be high or very high on financial confidence, compared with 37 per cent of women.
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Nearly one in three men (34 per cent) fall in the group that tends to have highest financial confidence (but low composure and impulsivity) compared with less than a quarter of women (24 per cent).
By contrast, nearly two out of five (38 per cent) of women are closest to the group which are low on financial confidence but higher on composure compared with 23 per cent of men.
“The results of the study are fascinating, showing that a higher proportion of men are more confident and more willing to take risks than women while women who are invested are less over-confident, trade less, and on average achieve higher returns,” said Michelle White, co-head of Investec’s private office.
“Recognising investor types enables wealth managers to tailor their messages and advice to address people’s views and help them. It is not just about gender gaps, but it is the case that lower financial confidence will mean people investing less and having higher cash balances which in turn means missing out on potential returns over the long-term.”
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