What lessons we can all learn from women investors
Women investors, investresses, are making impressive strides and paving the way for other women. They’re increasingly embracing value investing, running diversified multi-asset investment portfolios on behalf of investors, and managing assets worth billions of pounds, as part of a growing number of female role models who are gracefully leading the change that will inspire many generations to come.
But as more and more women enter the investment world, there are several valuable lessons that the investment community as a whole can learn from these investresses’ unique approach to investing. After all, it was the IMF’s first and only female boss Christine Lagarde who once famously said “if it was Lehman Sisters, it would be a different world”.
On International Women’s Day, Roxana Mohammadian-Molina, Chief Strategy Officer at Blend looks at five key lessons we must learn from inventresses:
Approaching investments with a long-term mindset
Investresses tend to take a long-term approach to investing, preferring to buy and hold to create value. Interestingly, this is a rule the notable investor Warren Buffet lives by – he once famously said that if you aren't willing to own a stock for 10 years, don't even bother with owning it for 10 minutes.
Investresses understand that the stock market can be volatile and unpredictable in the short term, so they focus on constructing a diversified portfolio that can withstand market ups and downs over time. Many studies have shown time and again that this mindset is essential for successful investing, as it helps to avoid knee-jerk reactions to market moves and instead encourages patience and discipline.
Investing time, discipline and patience
Warren buffet once famously said that the stock market is a tool for transferring money from the impatient to the patient. Indeed, patience and discipline are two essential skills needed for successful investing, and investresses excel in both.
They understand that investing is a marathon, not a sprint, and that building long-term wealth needs much perseverance, tenacity, and above all, dedication.
Investresses also tend to have the discipline to stick to their investment game-plan and make use of their emotional intelligence to avoid making impulsive decisions based on short-term market movements, which takes me straight to my third takeaway from investresses: lack of impulsiveness.
Using our emotional intelligence
Investresses show emotional intelligence when investing, which stops them from emotional investing. Emotional intelligence is a key trait of successful investors because it prevents them from pulse buying and selling, and generally helps them navigate the inevitable roller coaster of multi-asset investing.
Women are notably good at controlling their emotional intelligence because they understand that emotions as fear, greed, and overconfidence can cloud judgment and lead to poor investment choices. So, investresses tend to remain level-headed during market turmoil and avoid making rash decisions.
Taking time to research
Investresses tend to be diligent researchers and spend more time exploring their investment choices. Once again, it was the legendary investor Warren Buffet who famously advised to never invest in something you don't understand because some of the hottest investments can also be the most risky.
Investresses like to collect as much information and knowledge as possible about an investment opportunity before investing, ensuring they have a clear grasp of the risks and potential rewards.
Investing for good
Investresses tend to invest with goals in mind and economic returns are not always their main gaol. They are often more motivated by wanting to do good than by investment returns and prefer values-based socially responsible investing – 52% of women in a recent survey said they would rather invest in companies that have a positive social or environmental impact.
They seek to invest in companies that align with their values, such as those that prioritise sustainability, diversity, and ethical practices.
To sum it all up
Investresses bring a set of unique strengths and perspectives to the world of investing. Their long-term thinking, emotional intelligence, research, due diligence, risk management, patience and discipline, collective approach, and focus on value investing are invaluable lessons for all investors, but particularly for other women who are only getting started in their investment journey.
And that’s why on this International Women’s Day, I resolve to elevate the value of investing and help more women take a first step in the journey towards becoming a Smart Investress.
So, on this International Women’s Day, I invite you to join the Smart Investress community to get the weekly email that makes reading about finance and investing enjoyable and learn from other successful women investors to become better investors and help to create a more inclusive and equitable investment world.