Women Might be Better Investors Than Men. Here’s Why.
The wolf of Wall Street might not be who you expected. Or should we say the she-wolf of Wall Street?
While the world of finance has a reputation for being a boy’s club, it’s a mistake to assume that today’s most successful investors wear a suit and tie. Major news outlets including Forbes, the New York Times, and CNBC offer evidence that suggests women are better at investing. In fact, they outperform men by 40 basis points.
So what is it that gives female investors an edge?
They’re More Risk-Conscious
Risky business isn’t always the best business. On one hand, excessive caution is often the first barrier for women investors to overcome, and may keep them from investing at all. But when women do participate in investing, they’re more risk-conscious than men—72% of women reject riskier equities compared to 59% of men. That applies across the board, with 58% of male investors reporting that they’re willing to take financial risk, compared to 37% of women.
They Do Their Homework
While women take on less risk than men, that doesn’t mean they’re risk-averse. Women are willing to take risks—they just are more likely to take educated risks. In other words, women do their homework by researching possible investments, speaking with financial experts, and take on appropriate levels of risk.
Since women are more willing to educate themselves about investment options, they are more likely to discover alternative investments opportunities which have very low correlation to the stock market—or most other standard asset classes, for that matter. One exciting alternative investment is contemporary art. In fact, for the first time ever, women spent more on artwork than men in 2021. Just as exciting: art was recently named one of the hottest markets on Earth by the Wall Street Journal.
They Know Patience Is a Virtue
Women’s outperformance can also be credited to the types of investments they favor. Men are much more likely to hold speculative investments in the hopes of making a quick buck, and they’re more likely to hold onto a losing investment in the hopes that it will pan out. Women, however, are far more likely to take a “slow and steady wins the race” approach and opt for a fund with a consistent track record.
One “slow and steady” investment opportunity is blue-chip artwork. Contemporary art prices have outpaced the S&P 500 from 1995-2020, and it has low correlation to public equities over the same period. This arguably makes contemporary art a useful tool for portfolio diversification, as it can potentially buffer inflation, help to lower volatility, provide broader diversification, and lead to returns.
How You Can Join A New Generation of Women Investors
Here at Masterworks, we’re on a mission to empower everyday investors —just like you. That’s why we make it possible for investors to purchase shares representing an investment in authenticated multi-million-dollar artwork from iconic artists—such as Warhol, Banksy, Picasso, and Monet, among others. Backed by our expert research team, our partners at Citibank and Bank of America, and our experienced art acquisitions team, we make sure you have more data to make informed investment decisions.
Now, you can be a part of a new generation of women taking charge of their finances and investing in art. We invite you to learn more about our platform and how blue-chip art could potentially fit into your investment strategy.
Join a growing community of more than 300,000 members with Masterworks.
See important disclosures here.