The typical investor is almost always his/her own worst enemy. Overconfidence, behavioral biases and emotional decisions conspire to ensure investment returns trail not only most major asset classes but even inflation.
Consider the ROR of the average investor over the past 20 years:
2 SOURCES: JPMorgan Asset Management, Barclays, FactSet, S&P, Dalbar. 60/40 and 40/60 refer to stock (S&P 500) / bond (investment-grade U.S.) mix.
It’s food for thought the next time Y2K, the housing bubble, Brexit, the election of Trump or (insert favorite “crisis”) gives you itchy trigger finger.
For this particular study gender was not considered a factor. More broadly, however, numerous studies show that women are generally more “careful and measured” in their investment decisions than men who tend to be more risk-taking in their approach. Similarities may also be found when looking at groupings such as age, level of education, etc. Like any generalization it must be viewed in context. Being a man or woman, having “high” or “low” education, being of a particular age, etc. does not cause investor behavior. Behaviors are observed. Classification factors such as gender, etc are not causal.