Terrance Odean

Terrance Odean, author of groundbreaking research in the field of gender and investing

As we’ve written before, research suggests that women tend to be better investors than men, because they trade less often and take fewer risks. But women are prone to one big mistake: They don’t participate enough in the market. If you tie up your money in cash instead of a diversified portfolio, your returns will most likely suffer in the long term.

See our post on Investing Mistakes Men and Women Make.

(Men, who tend to be active investors, fall into the number-one investing trap: trading too often, as detailed by Terrance Odean. Not only are there costs associated with making trades, like commissions, but the human tendency is to buy and sell at the wrong times. The more often you trade, the higher your risk of making a timing mistake.)

In a guest post that the Upfront Blog supplied to 85 Broads, Zack Miller wrote about some more recent research that suggests that men and women invest best together.

A study on investing patterns in marriage and divorce showed that members of a married couple adjust the portfolio’s risk profile to jive better with their partner’s tolerance for volatility. Married men dial risk down and hitched women tend to own more stocks than they would when they were single.

And that spells more stock market participation for married couples than for single men and women. In fact, married couples generally perform better than single men and women, at least when it comes to retirement investing.

Examining nearly seven thousand retirement accounts, researchers found that married couples had 42.88% of their portfolios in stocks while unmarried people averaged only 36.52%. That exposure to the stock market– combined with less male-driven trading — means married couples in that same research performed better than single (8.92% per year versus 8.16%).

When men and women work together on the investing equation, the whole turns out to be greater than the sum of the parts. So go ahead, snuggle up this Valentine’s Day… and look over your portfolios together.

Subscribe to our blog
Please fill out this field.
You've successfully subscribed to our blog.

About the author(s)

Journalist Elizabeth MacBride is Wealthfront's editor. Her work has appeared in Crain's New York, Advertising Age, the Washington Post and the Christian Science Monitor, among other publications. View all posts by Elizabeth MacBride