Women top men as share tipsters

Share trading on the London Stock Exchange was analysed

The City's trading floors may still be dominated by men, but women are better share investors, according to research.

Analysis of 100,000 share portfolios by Digitallook.com has shown that women have invested far more wisely than men over the past 12 months.

The average woman's portfolio has grown by more than 10% in the year to 31 July 2004, the study found.

This compares to a 7% rise in the value of the FTSE All Share Index - and 6% average increase for men.

"When it comes to the dominant sex in the City, women have proved to be the consistent winner," said Andy Yates of the investment research website.

Risk takers

According to DigitalLook.com, the overwhelming reason for the success of women investors was their more cautious approach to investing.

Women tended to have more "balanced portfolios" compared to men who adopted more risky strategies and concentrated on fewer stocks.

I think women are more cautious and tend to use common sense about investing rather than blindly following hot tips Rose Townsent, Wily Wye Women

Men also tended to be too focused on data, rather than detailed knowledge of companies and "sentiment" - one of the most important issues in share investing.

The types of stocks chosen by men and women reflected their attitudes towards risk. This had an overall effect on the strength of their portfolios.

Risky bets

Men continued to bet on technology and biotech stocks, which were usually more risky and volatile, whereas women were more likely to invest in areas that they knew about, such as retail and banking stocks.

Rose Townsent from Wily Wye Women, a women's share investment club, said that it was a combination of common sense and research that helped women as investors.

"I think women are more cautious and tend to use common sense about investing rather than blindly following hot tips.

"Women also tend to be a bit more sentimental about buying local, well-known companies - and so have a lot more knowledge about the background and day-to-day business."

It may well be true that over the last twelve months the average woman's portfolio has grown by more than a mans. However, would there be a similar outcome in a bull market? Perhaps, over the entire business cycle, the tactics of men and women complement each other, as in life.
Bill Roy, Moscow, Russia

I don't know about the research, but I'm not at all surprised that women know more about retail investing since all most of them do all day long is spend their husband's money buying new shoes and clothes.
Dan, Canada

There are very few women who invest in shares compared to men and their apparent success is only attributed to a few women who only took a safe bet on the companies they chose to invest. If you look at statistics there is probably far more men who had earned more than women investors because they had invested in safe companies but this is also offset by risk takers and women don't often make the numbers.
Sam, UK

I think all this reporting that women are better than this or men are better than that, harks back to kindergarten and is divisive and counterproductive. Far better to report on examples where men and women have worked together to overcome challenges.
Brad, UK

All that this research shows is that men invest more boldly than women but that this last year the investment market has favoured cautious investment. I'm not sure how you get from there to the idea that women are better investors than men. There are plenty of years in the past where risky investments outperformed cautious ones. You would need a lot more statistical evidence than one year to draw such a sweeping conclusion.
Alastair, London, UK

Yes. It has been known for some time that women stick to their share making decisions. "Churning" through shares by constantly buying and selling will lose you money simply through dealing costs. In addition, women are generally more involved in day-to- day buying (food, clothes etc) so will have a better feel for the realities which shares later reflect. The belief of men in "Hot Tips" probably has a lot more to do with their "tunnel vision", so they see the logic of an argument to buy and focus just on that. Are men generally easy to con? There is also a deep seated male need to be a "winner" and only the supposed spectacular returns of the "hot tip" will provide the kudos of being a winner. In a perverse way, spectacular losses provide some men with the same thrill - it's better to stick out for any reason than be part of the pack. Finally, and more relevant recently, men love gadgets. In share terms that means technology stocks. So I say let the women run your investments lads. If nothing else they will really get into it and spend less time in shops and less cash on shoes. They might even pay for that meal out occasionally. OK, now I am being a dreamer.
Des (male), London, UK

Doesn't this just mean that the type of companies that women invest in have done better over the past 12 months? Not sufficient proof for making broad statements about women being "better investors" I feel.
Andy, Guildford

Both my husband and I are keen investors - and we follow the trend in this report exactly. He has more invested in technology and riskier markets whereas I tend to spread out and follow trackers more than anything else. The performance of my portfolio has far outstripped his at the moment. For long term investment - there's only one way to go. So I guess the moral to the story is, slow and steady wins the race.
Laura, Southampton, UK

It is likely that women will take less risks, a tactic which suites the current market but clearly that is not always going to be the fastest route to a gain. I don't understand why we even have to draw the contrast between male and female investors? If you want equality, why encourage competition? Besides, my partner has no interest in stocks and it was I who advised her to take a less risky investment while I took the more risky one - she's looking for stability if I die or we split up and I'm landed with trying to fund the dreams of tomorrow.
Andy, UK

Women investors (by this I mean amateur investors) will perform better when markets do badly (as in the last few years) because they tend to invest in companies they know or are interested in, for example, retailers. Men tend to invest in more cyclical companies that perform better when the markets are doing well. So it is hardly a surprise that, if you take a narrow time-frame when the markets have been weak, that women come out on top. Funnily enough I don't remember reading surveys about how much better men investors were versus women when the market was doing well! In the longer-term the riskier stocks will perform better (although they will be more volatile). Therefore, in the longer-term, men (or the male-favoured strategy) will "win".
James, London, UK

It is no good saying women invest better in this market, men in the other market. What you need are people who take a broad view of the whole cycle and invest according to the conditions they find.
Roger, UK

I already sadly notice some defensive male replies here. But the contention that women are better investors than us seems to be entirely believable to me; we (men) are always being advised to avoid risky stocks, but we just love the thrill.
David Rayner, Abingdon, UK

Where can I meet one of these successful women?
Phil B-C, Maidenhead

I think women are a more instinctively in touch with the basics of commerce: they do most of the buying in most homes, not because they are necessarily frivolous shop-a-holics, but because women tend to remember to buy all the things that men forget, like toothpaste, household cleaning products, bin liners etc. As a result they have an everyday feel for what things should cost at a basic level, and this gives women a solid foundation upon which to gauge the value of everything else further up the pyramid. When men spend money, its more likely to be on big one-off purchases like cars and computers [all the stuff at the top of the consumer pile], with less of the everyday spending. Male investors tend to be so caught up in the bigger picture, with their financial newspapers full of lists and numbers, that they may not be aware of the subtle shifts in public spending at the grass-roots which then affect the whole economy further up.
Hannah, London

If this survey had been carried out four years ago before the dot com crash, you would have seen a different story. Between 1990 and 2000 the tech heavy Nasdaq Index outperformed the Dow Jones Index four-fold. Give it another five years and the higher risk stocks are likely to be rocketing ahead of the safe stocks once again, the big question though, will be for how long.
Simon, UK