Verified by The Prince of Impatience
Evaluates the value of patience among women. How individual levels
of self-awareness vary.
By Peter Rebhahn published July 1, 2000 - last reviewed on June 9, 2016
Long-term investing is typically more lucrative than fickle
trading, and now it seems that more women than men understand the value
of patience.
Past research indicates that overconfident investors trade
excessively and that more men are overconfident in money matters than
women. To see if male investors pay a price for pompous purchasing, Brad
M. Barber, Ph.D., a University of California-Davis (UCD) finance
professor, and Terrance Odean, Ph.D., a UCD management professor,
compared more than 35,000 investor portfolios between 1991 and 1997.
Their findings, appearing in an upcoming Quarterly Journal of Economics,
show that married men traded 45% more and earned 1.4% less in average
annual returns than married women, while single men traded 67% more and
earned an average of 2.3% less a year than single women.
"Women do better because they trade less, and trading is costly,"
Barber explains. Trading costs--fees for trading stocks--consumed a
larger chunk of men's portfolios than women's. Still, all investors buy
stocks that under-perform those they sell. "Men and women are both poor
stock pickers--men just do it more frequently," Barber says.
