There are persistent gender myths about investing, such as the idea that men get better returns on their investments. We look at five presuppositions: are they true?  

Myth 1: Women invest emotionally, men rationally

False.

Men's investments are often guided by emotions. They invest in companies and industries that seem familiar or interesting:

  • "I know cars."
  • "I've always liked this brand."
  • "This ETF is trendy now."

Men make investment decisions largely based on their own judgment, which indicates more strong self-confidence than rational consideration.

Women evaluate their own skills more critically than men. They are more likely to recognise that they don't need to know everything themselves. In investing, that is a strength.

In OP Pohjola's data, the average investment assets of men are 53,000 euros, while for women it is 33,000 euros.

Women invest in funds more often than men. They trust portfolios made by professionals. This may be called insecurity, but it's about healthy self-awareness. Women understand their own limits and strive to manage risk.

Myth 2: Men are naturally better investors and get better returns

False.

Women's portfolios have often performed better than men's in the long run. This is because women invest more systematically than men.

Women invest more often in funds because they automatically diversify investments. It does not bring large individual profits, but it reduces risks and results in a more consistent return.

Men place more emphasis on individual stocks. They build portfolios where a few choices have a big impact on the bottom line. If one stock hits the mark, a spectacular success story will emerge.

When investing, long-term total return is more important than individual success.

Myth 3: Men's and women's investment portfolios are completely different

This is partly true, but the differences are exaggerated.

The most popular stocks in men's and women's portfolios are largely the same - the differences are mainly in their ranking. The most popular monthly investment products among men and women are largely the same in mutual funds, too.

The most obvious difference arises in how investing is done. Men focus on direct equity and ETF investments, while women's investments are more often focused on broadly diversified, often responsible investment funds.

In addition, the difference between men's and women's investment portfolios is reflected in investor profiles. Men's profiles are on average riskier, while women's profiles are more moderate. This guides the investment approach, even if the investment products themselves are largely the same.

Myth 4: Men take more risk – and it pays off in investing

This is partly true regarding risk-taking, but not regarding profitability.

For men, investing more often becomes a game. They may be interested in new phenomena such as cryptocurrencies. A portfolio can even be built on one promising idea. The goal is quick profit and great success. Similar features are seen in gambling.

In the long term, such a strategy is not the most effective. The lower risk level typical of women helps them stay calm if the value of a stock drops sharply in a diversified portfolio. It reduces the need for hasty decisions. It is not a good idea to sell investments in a panic. 

Myth 5: The gender gap in investment assets is huge at all levels

Not true in the form the statement is often presented in.

In OP Pohjola's data, the average investment assets of men are approximately 53,000 euros, while for women it is approximately 33,000 euros. However, the difference is largely explained by a small number of very wealthy customers who raise the average for men. When looking at the median, or typical investor, the difference is significantly smaller. The assets of a typical male investor are approximately 8,200 euros and those of a female investor are approximately 7,400 euros.

Especially in younger age groups, the investment assets of men and women are already quite close to each other, and there are hardly any differences among minors. Larger differences are still visible in middle-aged and older age groups, reflecting the structures of previous decades.

Investing is now possible for many people, and you can get started even with smaller amounts.

Specialist of the article: Tiina Routamaa, OP Pohjola asset and wealth management.