Dear Financial Voice Reader,

Wednesday 05th June 2019 05:39 EDT

Calling all female readers- research shows you are better in business, investing and trading than men! Read this:

The UK Government’s Treasury Department has recently launched a review into barriers for women in business. When I wrote my book about women entrepreneurs, ‘Our Turn’ sponsored by the then Bank of Scotland, little did I know just how many advantages men have thanks to women (and other men blocking women).

Some of the key blockages included, according to research, relative to men, a more realistic sense of success. Men in their cliched bravado tended to be more self confident of their own abilities, (self-attribution bias), and so underestimated the chances of failure and went gung-ho into business.

You’re already familiar with these issues affecting women in the workplace. You are willing to work longer for the same pay as a man, research proves it. Thank you. It makes it easier to pick a man to promote – heck I’m hardly about to move someone up who works the longest hours am I to do the same work?

And it’s unfortunate because the world needs more women entrepreneurs than ever. It needs more women in business because statistically they are more likely to succeed. It needs more women running top companies FTSE companies, because statistically their share prices do better. It needs more women at heads of Government, because statistically it leads to less wars. It needs more women managing household finances, because statistically it leads to less personal insolvencies.

There can be little doubt about male dominance when only one out of a hundred of the UK’s largest companies are headed by a woman. Even in the US, it’s a similar proportion of women who head Fortune 500 companies.

Eighty per cent of women-owned businesses that need credit are under-served worldwide, creating a £1.3 trillion financing gap according to research last week. Also according to the Rose Review “only 13pc of people on UK investment teams are women and 48pc of investment teams have no women at all. This is reflected in the fact that less than 1pc of UK venture funding goes to all-female teams and just 4pc of deals.”

Not only does research show women run business do better, but also those with a more gender balanced board – basically on every metric it makes sense investing in women. But it doesn’t happen. So women have started their own funds, their own investor groups to invest in women led businesses.

How ironic. Research shows 46 per cent of all US businesses are owned by women, and employment at women-owned businesses is growing at 18 per cent, compared with 8 per cent for all companies, according to business magazine Forbes. Actually, US women have an average net worth of £1.96 billion compared with the men, at £1.45 billion.

And when it comes to investment, research also shows women make better investors than men. Women’s portfolios earned 1.4% annually more than men’s did in a study of over 35,000 investors by the University of California at Davis. Indeed, single women earned 2.3% annually more than single men.

Poor male performance is due to over-trading, according to the study. Men trade their accounts 45% more often than women. And single men shuffle their holdings 67% more than single women. Perhaps the adage about men’s fear of commitment is true after all.

A National Association of Investors Corporation ten-year study found all-female investment clubs outpaced all-male investment clubs by producing 23.8% average compounded lifetime annual returns compared to 19.2% for male clubs.

Do women also make better traders? So I crowdsourced the answer to this perennial question. Who is better then (thanks Marcus Taylor) – this is what Marcus said:

“A study conducted by the University of California of 35,000 brokerage accounts has shown that women make higher returns than men, on average by 1.5 %. It even goes so far to say that single women made 2.2 % more than their single male counterparts.

· The National Association of Investors Corp in Maryland (USA) revealed in their study that all women investment clubs outperformed all male investment clubs by an average of 5 % per annum. The reason for that? Apparently, it is because women trade less often and do have less tolerance to risk than males.

Alpesh Patel

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