Misconception #1. Investing Requires a Mathematical, Not Intuitive, Approach
It is true that technical investing is based on mathematics, but it is a misconception that men are more capable of mathematical analysis or picking wise investments. A combination of math, female intuition, and an eye for future returns worked well for Abigail Adams.
Adams was the wife of John Adams, president from 1797 to 1801, and she is known as one of the nation’s “first” female investors. Adams understood that government bonds paid the face value at a future date and provided periodic interest payments in the meantime. She chose to buy bonds over farmland at a time when there was little confidence in America’s economy. According to historians, she ultimately realized a return of 400%.
Misconception #2. Women Are Not Aggressive Enough As Investors
Some women may be less aggressive when it comes to investing, but it is a misconception that being aggressive yields better returns. Women often see beyond short-term gain and seek to empower others for long-term stability and success.
Abigail Adams embodied this strategy. She used her wealth to benefit other women and minorities so that they too could contribute to the nation’s economy. These oppressed sectors of society were unlikely to receive funding from any other source, so Abigail used her financial gains to support women’s rights, female education, and the abolition of slavery for a better economy overall.
Misconception #3. Women Lack the Confidence to Be Successful Investors
There is no evidence that women lack confidence when they invest. In fact, men have been described as overconfident, which can be detrimental in the long run. Hetty Green was a financier during the Gilded Age. She inherited considerable wealth, and, unlike most women of her time, controlled and managed her own finances, even after marrying in 1867.
Green diligently saved following a long-term buy-and-hold strategy in stock. She also invested in bonds, real estate, and railroads, avoiding the rampant speculation in the markets. Green amassed such a fortune that she even loaned the city of New York $1 million in 1898. When Green died in 1916, her estate was worth an estimated $100 million.
Misconception #4. Women Are Not Finance Savvy
It’s a misconception that women lack business savvy. The truth is that they have long battled a glass ceiling that hindered their advancement in certain male-dominated fields like finance.
Geraldine Weiss discovered her knack for investing when she began to invest her husband’s income. Still, when she sought employment in the finance sector, a secretarial role was the only option. Frustrated, Weiss chose an alternative path and founded a newsletter for investors in 1966, which ultimately ran for 37 years. According to MoneyWeek, Weiss’s strategies yield an average 11.2% annual return compared to the market average of 9.8%.
Misconception #5. Women Are Too Relationship-Oriented for Business
Women are more relationship-oriented when it comes to business, but this is a characteristic that plays to their advantage rather than their detriment. Barbara Corcoran, an investor in the hit show Shark Tank, began a real estate brokerage business with just $1,000 in 1973 and built relationships using powerful outreach to stimulate growth.
Corcoran marketed herself as a real estate expert and built relationships with clients. A real estate trends report that Corcoran published helped her to build a brokerage group that sold decades later for $66 million. Corcoran now uses her relationships to directly impact her investments—a $50,000 investment she made in a sweatshirt company on Shark Tank has netted her a reported $30 million to date.
Misconception #6. Women Don’t Make Enough Trades to Yield High Returns
Research shows that overconfidence causes men to trade more often, which is detrimental to returns. Thus, less is more when it comes to trading.
Kathy Xu is the founding partner of the Chinese firm Capital Today. Xu carefully selects only 5 to 6 deals a year and thoroughly weighs the pros and cons. Xu invested in the early-stage startup e-commerce site, JD.com, and her $18 million investment yielded her firm a $2.9 billion payday. Thoroughly researching a company before cutting a check, and limiting the number of companies she considers, has made Xu the most powerful female investor in the world.
Misconception #7. Women Lack the Drive Required for Investing
Women face hurdles that men don’t in certain male-dominated professions, yet many female financiers consistently exhibit unceasing drive, even in the face of adversity.
Muriel Siebert took on entry-level research positions in finance, eventually made partner, and founded the brokerage firm Muriel Siebert & Co. in 1967. However, when Siebert tried to register her firm with the New York Stock Exchange (NYSE), her application was repeatedly denied, and she faced expensive entrance requirements. Eventually, Siebert succeeded, and her firm became the first woman-owned member of the NYSE. Siebert went on to rise in the ranks of another male-dominated field, politics, and was New York State Banking Department Superintendent from 1977 to 1982. In 1982, she ran for the US Senate.
Misconception #8. Women Lack Qualifications
Women’s credentials are often just as impressive as those of their male counterparts, and women can have just as much experience, if not more.
Abigail Johnson became Chairman and CEO of Fidelity Investments in 2016, after serving as President and CEO since 2014. She is the daughter of former Fidelity Chairman Edward C. Johnson III and granddaughter of the company's founder. Although she was born into the right family, she was also highly qualified. Johnson earned an MBA from Harvard and worked as a customer service representative, an analyst, and an equity portfolio manager with Fidelity for about a decade before earning her first executive position. She now owns nearly 25% of the company, and her net worth is estimated at around $11 billion.
Misconception #9. Men Are Better Financial Strategists Than Women
Women are often burdened with additional responsibilities on top of work, such as caring for family members and managing households. Juggling all these responsibilities requires constant navigation of problems and opportunities, even the ability to “see around corners.” So, women are arguably better strategists than men.
Anne Wojcicki founded the genetic-testing company, 23andMe, which offers genetic tests straight to consumers. Wojcicki anticipated market shifts in customer, competitor, regulatory, and technology trends and noticed trends in the power of big data, cost reductions in DNA sequencing, and patients’ desire for medical engagement. Wojcicki’s vision catapulted her product to success.
Misconception #10. Women Do Not “Belong” in Finance
In Saudi Arabia, it is socially unacceptable for women to work in business, yet Lubna S. Olayan is CEO of Riyadh-based Olayan Financing Company, one of Saudi Arabia's most prominent companies. Olayan runs a conglomerate that oversees 50 other companies and is one of the largest investors in the Saudi stock market.
Olayan entered the family business in the early 1980s. Although being a member of the family was clearly an “in,” Olayan still had to overcome social obstacles to successfully run a conglomerate. Olayan is committed to her trade and to empowering others like her. She employs more than 540 women in her company and proudly champions women in the workforce.
Disruption Is Again Facing the Finance Sector
These examples and misconceptions imply that it is not drive, talent, qualifications, or character that has limited women’s visibility in finance but rather history, tradition, mores, and social structure. Disruption is again facing the finance sector, but this time gender is the culprit, not technology.
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