Why Women Are Natural Long-Term Investors

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Why Women Are Natural Long-Term Investors

Many of us have heard the expression, “It’s a marathon, not a sprint,” when faced with adjusting our attitudes to meet a long-term challenge. As the spring running season gets underway, we at The Humphreys Group (where we count several runners among us, including yours truly!) have been thinking how these words also apply to individuals and couples who aim to develop winning, long-term financial plans, and to female investors in particular.

Consider the notable lesson learned from participants in the 2018 Boston Marathon, where more women literally “went the distance” than men and gained the attention of multiple observers for doing so. Female participants — in one of the most grueling and well-known 26.2 mile races in the United States — lasted longer and finished in greater numbers when bad weather led to increasingly challenging course conditions last April; just 3.8 percent of women dropped from the race, compared to 5 percent of male runners.

The stamina of female marathoners did not go unnoticed. Shortly after the race, The New York Times ran an opinion piece by Lindsey Crouse, a runner and NYT senior staff editor, who asserted the idea (and added related links) that women have the capacity to withstand both physical challenges and mental stresses for long periods of time — in some cases much longer than men.

In an article for Business Insider several months later, Shana Lebowitz explored the theory that women may be more driven to complete a race as their end goal, whereas men tend to want to win a race above all else. Drawing a connection between women’s racing mindset and other areas where women exhibit an attitude that relies on mental staying power, she noted: “And the implications of this gender difference go beyond marathons, or athletic prowess.”

Backing up Lebowitz’s observation are those who’ve examined the possible relationship between gender and financial investing traits. Some writers have noted differences between women and men when it comes to money-related decisions and provide evidence that women investors exhibit marathon-like behaviors when it comes to investing: they make steady choices that will result in bigger long-term financial gains and stability, and react to setbacks with less stress and emotion that men.

Others assert that the concerns some women voice about their supposed lack of investing abilities are not strongly supported. A recent MarketWatch article emphasizes that, despite professing lower levels of confidence in their investing abilities and exhibiting more risk-averse tendencies when it comes to investing, women generally possess the characteristics of solid long-term investors.

The 2019 Boston Marathon is still weeks away. We can’t predict April’s weather conditions, but everyone who persists toward that finish line is a winner in our book. In the spirit of those who are preparing to travel a lengthy course — including a financial one — we encourage you to contact The Humphreys Group to see how we can help you stay on track and go the distance with your investment strategy.