There is a type of investment strategy which can be put under the category of ‘reckless conservatism’ – this refers to an ultra cautious approach, which aims to be so risk free that it can miss out on potential high returns.
While there is no doubt that erring so heavily on the side of caution might be misguided, there is a growing body of evidence to suggest that a brand of investment which is not overly confident can pay dividends. A recent study conducted by Fidelity Investments has revealed that as little as nine per cent of women feel that their investments will perform better than those placed by men.
A sign that self belief is lacking among female investors? Perhaps so, but further findings from the research show that women actually perform better in the investment world by 40 basis points – the equivalent of 0.4 per cent. So it appears as though this ‘under confident’ approach could in fact lend itself to making smarter investments.
Despite not being confident of high performance, that doesn’t appear to be deterring an increasing number of women to make investments. Fidelity Investments has tracked a significant upsurge of 19 per cent in its own female investor base, taking its total number up to 12 million over the last three years.
But Alexandra Taussig, Fidelity’s senior vice president of women investors, suggested that there is still room for many more female investors to engage with their financial assets. She said: “The results of Fidelity’s latest analysis reinforces that women too often underestimate their strengths as savers and investors. It’s time to celebrate our abilities and maximise them by making a commitment to get more involved with our money.”
There is certainly no shortage of role models for female investors to take inspiration from, and financial expert Gérard Cohen, the Monaco-based banker, cited the long list of successful businesswomen as a potential confidence booster.
Monaco’s Gérard Cohen said: “From Geraldine Weiss, creator of the dividend based investment system, to Mary Callahan Erdoes, the CEO of JP Morgan Asset Management, there are many examples of women who have not only succeeded in the world of investment, but have gone on to become revered as pioneers. Fidelity’s research has confirmed what some of us had suspected all along – that while some women may lack the confidence of their male counterparts, in many cases, their investments actually perform a lot better.”
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