Women have a tougher time on the golf course than men. They may assume the perfect posture but a weak grip on the backswing can turn into a lousy shot. In investing, however, the less aggressive behaviour is earning women higher investment returns.

Women’s 2014 median investments returns beat out those of men by 12%, according to a gender and investing study by financial services provider SigFig. Men are also more aggressive investors, trading in and out of stocks more frequently, and this portfolio churn is lowering their returns.

Over 30 years, the female investment advantage can add up to around $60,000 on a $100,000 portfolio. You could be driving to the golf course in a new BMW, or spending your extra money on golf vacations.

Women also make investment mistakes. The more passive sex can also lose money on investments by being too conservative, such as never optimising a portfolio or keeping too much cash in the bank.  Understanding these investment traps can increase your investment returns.

Traditionally, women have retired with two-thirds of the retirement savings of their spouses. With more women self-directing their investment plans, the millennial generation should do better and save more for retirement. Women, though, still face many interruptions in earnings, including pregnancy and child-rearing, and are paid less. Becoming aware of the financial mistakes women make can help you increase your investment returns and close the gender gap.

Understanding the Biggest Financial Mistakes Women Make

  1. Ignore the time value of money – Luxury goods sales are growing at double digits in Asia. If you cannot resist the new Louis Vuitton coin wallet, do the math. If you invested the $1000 – the price tag of the wallet – in a savings account with compound interest at 2%, that money would be worth $1,800 in 30 years. If you cut out only $1000 a year from your luxury goods budget, as you can see, it could easily add up to an additional $50,000-$60,000 in your retirement nest egg.
  2. Pay too high in fees – The more passive female investor is paying higher investment fees than male investors. This disparity widens with age. At age 80, a woman could be paying 7% in investment fees while a man pays less than 6%, finds SigFig. Millennials are more savvy about fund expenses. They know exactly what they are being charged for their online stock trades. They demand transparency. Do some research and ensure you are not paying too high of fees. As you get older, lock-in fees, or have them float relative to a benchmark to make it difficult for unscrupulous financial advisors to overcharge you.
  3. Too much cash on hand – Women benefit from their conservatism as investors, but money not needed in the next year should be earning higher interest than that paid in a savings account, especially in today’s low-interest-rate environment. High yield savings accounts and money market funds are options. Being too risk adverse can cost you money.
  4. Overreliance on robotsRobo advisors are popular. The ability of these robots to assess investment risk, develop a suggested investment portfolio, and optimise the portfolio within minutes has investors impressed. The investing talent of artificial intelligence, however, may be overrated. The Wall Street Journal put robo-advisors to the test and found that given the same investor profile – a young software engineer named Ed Lee – robo-advisors can produce different hypothetical investment portfolios with a wide range of returns.  Whether you choose to use human or robo-advisors, seek advice from several sources on your optimal portfolio allocation.

    How Powerful Women Can Be Fashionable
  5. Underestimating your longevity – We are living longer, and women continue to outlive men. Many women underestimate how many more years a vegetarian diet and yoga lifestyle can add to their lifespan. Surprisingly, many couples’ retirement plans still reflect the longevity and retirement needs of the husband. You will also likely be working longer, possibly even into your 70s. Today, more of us are in occupations we are passionate about and will engage in into our 90s. Working is no longer about putting in our time until retirement. Retirement savings plans also need to be adjusted. For example, you may choose to pay into a pension plan and extend your annuities until you are 70 instead of 65.
  6. Performing regular portfolio reviews – Women benefit from not over trading, but juggling a portfolio from time to time to optimize investments is a smart strategy. Underperforming investments can be replaced. Do not make the mistake of selling the winners – let the winners run. Big data is allowing us to be even smarter investors by drawing on the collective wisdom and investment mistakes of millions of investors. SigFig is one of the financial services firms repackaging this information into a valuable investment tool. SigFig Guidance is a free investment tool that will analyze your portfolio and make suggestions on how to optimize your returns and fees.
  7. Letting your husband manage the money – As the more adept investor in the family, why lose 12% a year on your investment portfolio? If you address some of the common mistakes on this page, you could increase your investment performance even more. Likewise, using your husband’s financial advisor could also drag down your performance.

Consult female investment advisors and invest in funds of female investment managers. The Pax Ellevate Global Women’s Index Fund invests in companies that advance women in corporate leadership positions.

More women investment networks are developing so women can share their investment prowess. Former Wall Street executive Sallie Krawcheck – the developer of the Pax fund – has launched a global network of women investors called Ellevate.

Read: Do Women Invest Better Than Men?

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Founder @ The New Savvy
Anna Haotanto is the Advisor (former CEO) of The New Savvy. She is currently the COO of ABZD Capital and the CMO of Gourmet Food Holdings, an investment firm focusing on opportunities in the global F&B industry. She is part of the founding committee of the Singapore FinTech Association and heads the Women In FinTech and Partnership Committee. Anna is the President of the Singapore Management University Women Alumni. Anna invests and sits on the board of a few startups. Anna is also part of the Singapore Chinese Chamber of Commerce & Industry Career Women’s Group executive committee. Anna’s story is featured on Millionaire Minds on Channel NewsAsia. She hosts TV shows and events, namely for Channel NewsAsia’s “The Millennial Investor” and “Challenge Tomorrow”, a FinTech documentary. Anna was awarded “Her Times Youth Award” at the Rising50 Women Empowerment Gala, organised by the Indonesian Embassy of Singapore. The award was presented by His Excellency Ngurah Swajaya. She was also awarded Founder of the Year for ASEAN Rice Bowl Startup Awards. She was also awarded the Women Empowerment Award by the Asian Business & Social Forum. Anna has been awarded LinkedIn Power Profiles for founders (2018, 2017), Tatler Gen T, The Peak’s Trailblazers under 40 and a nominee for the Women of The Future award by Aviva



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