{"id":7363,"date":"2016-05-02T10:32:23","date_gmt":"2016-05-02T17:32:23","guid":{"rendered":"http:\/\/blog.paladinregistry.com\/?p=7363"},"modified":"2016-05-02T10:32:23","modified_gmt":"2016-05-02T17:32:23","slug":"women-excellent-investors","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/investing\/women-excellent-investors\/","title":{"rendered":"Why Women are Excellent Investors!"},"content":{"rendered":"

Women are different than men.\u00a0 As a Certified Financial Planner\u00ae this holds true in the investment world.\u00a0 Women are faced with unique challenges as they prepare for retirement. Women live longer than men meaning their retirement assets need to last longer.\u00a0 A 65-year old woman is expected to live, on average, another 20.3 years.\u00a0 Also, women earn less than men.\u00a0 Part of the reason is that women are more likely to work part-time jobs and there are gaps in employment due to the birth of a child.\u00a0 Therefore, social security payments for women are generally lower.<\/p>\n

However, research tells us that women are excellent investors.\u00a0 According to Openfolio<\/a><\/span><\/strong>, an online investment platform, female investors outperformed male investors by an average of 0.4 % in 2014.\u00a0 In another study by SigFig<\/a><\/span><\/strong>, women outperformed men by 12% in 2014.<\/p>\n

So Why are Women such Great Investors?<\/strong><\/p>\n

Women are Committed<\/strong><\/p>\n

Women are more likely to stay committed during a recession. Women stay the course and are more stable with their investments.\u00a0 According to Gary Dayton, founder of TradingPsychologyEdge.com, women tend to be calmer, remain steady under pressure, and do more research.\u00a0 These character traits are important because women stick with the plan and trade less.\u00a0 In a 2001 academic paper, \u201cBoys Will Be Boys: Gender Overconfidence and Common Stock Investment<\/a><\/span><\/strong>\u201d Brad Barber and Terrance Odean found out that men trade more excessively than women thus hurting portfolio returns.\u00a0 Women are more patient thus producing positive long-term investment portfolio returns.<\/p>\n

Women save More<\/strong><\/p>\n

Women are more likely to save than men. According to Vanguard, women save across all income levels 7% and 16% more than men.\u00a0 Fidelity found out among its clients that men save 7.9% of their salaries and women save 8.3%.\u00a0 Women also save more in their retirement plans than men.\u00a0 The participation rate for women is 73% and only 66% for men.\u00a0 You may say these percentage amounts are small, but over time the values really add up.\u00a0 \u00a0Since women live longer than men, saving more is beneficial because their retirement assets need to last longer.<\/p>\n

Women Ask for Help<\/strong><\/p>\n

Women are more likely to use a financial advisor.\u00a0 According to Prudential\u2019s 2012 \u2013 2013 Research Study titled \u201cFinancial Experience & Behaviors among Women<\/a><\/span><\/strong>\u201d, women seek financial guidance from a financial professional more than men.\u00a0 Working with a financial advisor pays off in the long run.\u00a0 My recent article, \u201cHow Much is a Financial Planner Worth?\u201d<\/a><\/span><\/strong> explains that working with a financial planner pays off in the long run. The conclusion of Vanguard\u2019s study \u201cQuantifying Vanguard\u2019s Alpha<\/a><\/span><\/strong>\u201d was that working with a Certified Financial Planner<\/a><\/span><\/strong>\u00ae increases the client\u2019s portfolio return by 3%.<\/p>\n

Six Steps to Take<\/strong><\/p>\n

    \n
  1. Begin working with a Certified Financial Planner\u00ae that is affiliated with an independent Registered Investment Advisor (RIA) firm to help you prepare for retirement. An independent CFP\u00ae works with his or her client\u2019s in a fiduciary capacity<\/a><\/span><\/strong>.\u00a0 This is extremely important because this type of financial planner is required to always do what is in the client\u2019s best interest.<\/li>\n<\/ol>\n
      \n
    1. If you are married, work as a team regarding your finances. If one spouse works with a financial advisor make sure you both meet with him or her. Set-up a disciplined budget.\u00a0 A good rule of thumb is to earmark 15% of your income for retirement savings.<\/li>\n<\/ol>\n
        \n
      1. Take full advantage of your matching opportunities within your 401(k) at work. Your employer is providing free money therefore please take advantage of this option.\u00a0 If you do not have a 401k through your employer there is no need to worry.\u00a0 A competent CFP\u00ae can walk you through retirement planning vehicles outside of your employer benefits to prepare you for retirement.<\/li>\n<\/ol>\n
          \n
        1. Consider working past the age of 62 even if your spouse is retired. Your Social Security benefits will increase.\u00a0 There are multiple social security claiming strategies for a married couple.\u00a0 Sitting down with a financial planner that can walk you through your maximum claiming strategy is important for a proper retirement plan.<\/li>\n<\/ol>\n
            \n
          1. Understand your investment risk tolerance regarding your investment portfolio. In other words, \u201cWhat is the Maximum loss you would accept before you would begin to feel very Uncomfortable?\u201d\u00a0 If you are more moderate risk\u00a0(Goal of 9% to 10%\u00a0per year over 5-10 years) a tactically managed stock portfolio<\/a><\/span><\/strong>\u00a0to where you will not have catastrophic losses within your portfolio is your best choice. However, if you are lower risk (Goal 6, 7, 8% per year over 5-10 years)\u00a0then a properly designed tactical\u00a0bond\u00a0(fixed income) portfolio\u00a0may be\u00a0more appropriate for your financial situation.<\/li>\n<\/ol>\n
              \n
            1. The #1 fear for investors is outliving their money<\/a><\/span><\/strong>. If you are in or near retirement, income planning or cash flow planning is key.\u00a0 A great solution is a product that is safe and secure and offers guaranteed monthly income during retirement.\u00a0 In other words, money you can never outlive.\u00a0 Keep in mind, this type of product offers asset based long-term care. With women living longer and almost a 70% chance of needing some type of long-term care service after the age of 65, long term care coverage is a must.<\/li>\n<\/ol>\n

              To learn more about Blake Fambrough and his approach to financial planning designed for women\u00a0view\u00a0his Paladin Registry Research Report<\/a><\/span><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

              Women are different than men.\u00a0 As a Certified Financial Planner\u00ae this holds true in the investment world.\u00a0 Women are faced with unique challenges as they prepare for retirement. Women live longer than men meaning their retirement assets need to last longer.\u00a0 A 65-year old woman is expected to live, on average, another 20.3 years.\u00a0 Also, women earn less than men.\u00a0 Part of the reason is that women are more likely<\/p>\n","protected":false},"author":77,"featured_media":7366,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[395],"tags":[],"class_list":["post-7363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"yoast_head":"\nWhy Women are Excellent Investors!<\/title>\n<meta name=\"description\" content=\"Research tells us that women are excellent investors. According to Openfolio, female investors outperformed male investors by an average of 0.4 % in 2014.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.paladinregistry.com\/blog\/investing\/women-excellent-investors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Women are Excellent Investors!\" \/>\n<meta property=\"og:description\" content=\"Research tells us that women are excellent investors. 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