According to a recent study commissioned by the Bank of Montreal, only 16% of Canadian women consider themselves aggressive investors (compared to 30% of men). The report says this like it’s a bad thing. Funny, because all the data shows that women are better investors than men, both in regular households and in jobs like hedge-fund managers.

Self-serving, banks and investment companies are more adept at scaremongering than they are at returning shareholder value. Newspapers blast headlines like, “New bank study says you will outlive your money!” “Leading economist says GICs give negative returns!” “Will you ever retire?” These alarmist pronouncements jolt us with nightmare visions of working at 75 as Walmart greeters in support hose or frothing lattes with our arthritic fingers as Starbucks’ baristas. And because women live longer than men—in the UK, for example, five women will receive a personal letter from the Queen on their 100th birthdays to one man—their money will have to last a lot longer. Not to mention that the average woman will have less of it to go around. (A recent US report showed that by the time a woman is 64, she will have forfeited $430,000 due to wage gap.)

Now for the good news. We’ll be fine.

Contrary to popular belief women have several traits that make us superior investors in both bull and bear markets. Unlike men who treat investing as a competitive sport, women do a lot of research before making investment decisions and tend not to impulsively jump on ‘hot tips’. We take a long-term view and, therefore are less likely to trade frequently and incur commission charges that cut into returns. For example, when the market crashed in 2008, women typically stuck with their investment strategies whereas the average male investor sold his holdings taking a loss.

Neuro-econonmist Paul Zak attributes these behavioural differences to the hormones testosterone and oxytocin. The greater concentrations of testosterone in men leads to risk-seeking behaviours and high degrees of emotionality. Whether that expresses itself in acts of heroism, bar fights or investing in junior mining stocks, is, of course, up to the individual. On the other hand, oxytocin, found in higher concentrations in women, gives a calming influence which may partly explain why female investors are less likely to panic and sell into a down market.

In her book, Warren Buffett Invests Like a Girl, LouAnn Lofton analyzed the ‘Oracle of Omaha’s’ investment style and found that he fit the female pattern: a buy-and-hold, value investor who does his homework. When asked about the claim, he answered, “I plead guilty.”

How odd then that BMO would say that women need to become more aggressive investors. Perhaps what they really mean to say is, “Please, pretty-please won’t you trade more so we can meet our quota of commission fees?” Have they not seen the study that analyzed 35,000 American households and found that men traded 45% more than women and reaped returns that were 1.4% lower? The returns of single men were even worse: 67% more trades than single women and a comparable 2.3% loss. So, if BMO really wants to help Canadians save for retirement, it should coach men to invest more like women, not the other way around.


This essay was originally published on