Female investors follow recommended investment principles more often than men, according to a new survey by the Wells Fargo Investment Institute.
The survey found that single women traded 27 percent less frequently than single men, possibly because men tend to be overconfident about their investment ability. The study said overconfident investors tend to believe they know more than they actually do, and that leads to frequent trading which exacts direct and indirect costs that can lessen returns.
Women have a more disciplined approach to investing that may contribute to their stronger risk-adjusted returns. Male investors tend to invest 100 percent of their accounts in stocks at least twice as often as women, and they are six times as likely to make massive allocation shifts, switching from 100 percent stocks to 100 percent bonds or vice versa.
Women, the study found, are more likely to seek education and advice from investment professionals.