Learn from Smart Women

Learn from bSmart Members

In late May, the Huffington Post ran an article citing a study that found women to be more successful investors than men.  The actual study was conducted by SigFig and analyzed 750,000 different investment portfolios, considering the collected data with regard to gender.  The findings were headlined by the statistic that in 2014, 'female investors had 12 percent better returns than male investors.'

Oddly enough, one of the main reasons used to support these statistics is that men are more confident in their financial decision-making.  Yet as the Huffington Post's article states, the more confident an investor is, the more likely he or she is to be overactive, and end up losing money.


Purchase Erickson Beamon Dollar Sign Earrings here.

These are encouraging findings for women managing their own investment portfolios, and yet I can't help but feel that the ideal scenario is one in which female investors are just as confident as anyone else but remain disciplined enough to keep generating positive results!  Confidence can be hard to come by in modern markets, however.  That's especially true given that despite the rebound of the U.S. economy, the stock market is as difficult as ever to navigate.  So, to help foster increased confidence and enduring discipline, here is a quick look at five popular misconceptions about modern investment, and how understanding them can help strengthen your portfolio.

1) The News Fosters Real-Time Investments

A lot of people who manage their own investments, either as a full-time job or on the side, believe that paying close attention to news sources like CNBC means being able to invest in real-time.  Yet, as is pointed out in a similar post about investment misconceptions at Karagosian Financial Services, automated computers and professional traders will always be quicker than a private investor.  Additionally, real-time news isn't always accurate or easily deciphered, which makes immediate trading based on news somewhat risky.  Every investor should pay close attention to the news, but don't succumb to the illusion that being the first to hear an update means being the most poised to invest accordingly.

2) The Market Is Rigged

This is an increasingly popular opinion among private investors, though frankly it's not helping anybody.  The degree to which this is a misconception is up for debate; it's certain that the market is deeply manipulated, and that certain professionals, hedge fund companies, automated systems, etc. can have advantages.  However, to call it 'rigged' is somewhat dramatic and carries a pessimistic sentiment that isn't going to do any investor any good.  My advice to investors: ignore the idea of rigging, accept that you may not have every advantage in trading, and do the best you can.


Female investors had 12 percent better returns than male investors.


3) Some Investments Are 'Safe'

'Safe' is one of the most dangerous adjectives in the world of investing, and it's one that unfortunately gets tossed around all too often.  In particular, many associate the term with resources like gold and other precious metals, which are usually viewed as necessary elements for the diversification and long-term stability of a portfolio.  In describing the very concept of gold investment, FXCM writes 'gold is the most popular investment of all precious metals, with many investors buying it to diversify risk.'  The description goes on to discuss how the gold standard is no longer used in any world economies, resulting in a standardized universal price that many use as justification for investing as a 'hedge' against currencies.  The thinking is that while currency values fluctuate, gold remains safe or stable.  Gold is not the only resource with this type of misconception attached to it, but the popular precious metal's plummeting prices in recent years demonstrates just how risky it is to buy in to talk of any investment being 'safe.'

4) Mutual Funds Are Hassle-Free

Particularly for beginner investors or young people unfamiliar with managing their own portfolios, mutual funds are commonly recommended as simple or hassle-free options.  Indeed, the idea is appealing, and in many cases appropriate; investing in a mutual fund basically means trusting a professional investment firm with a pre-arranged bundle of stocks designed to use diversity in a way that makes the overall package likely to make money over time.  In short, put your money into a strategic investment package without managing the strategy on your own.  I'd never advise an investor to avoid mutual funds without knowing the specific circumstances, as they can be perfectly viable options.  However, don't go into it believing that such an investment style is hassle-free.  Fees for transactions can be expensive, and selecting the right fund to begin with can be very stressful.  This investment still requires time and money.

5) All Investments Are Expensive

Sometimes investors are scared off by certain transactions because fees can add up over time.  Also, investing on its own is expensive.  While it's true that these fees can add up, it's important for strategic investors to recognize that different transactions can be more affordable than others.  For example, mutual funds often involve heftier fees than the individual purchase of a few stocks here and there.  Alternative resources like the precious metals discussed earlier are available for purchase on private websites with relatively manageable fees.  And recently, we've even seen the rise of new technologies and services like the increasingly popular Robinhood app, which is designed to allow investments completely free of transaction fees.  The best strategy in the end is to be wary of investment costs, but don't assume every transaction is expensive.


Patti Conner is a private entrepreneur and freelance writer based in Seattle, Wash.  She writes frequently on the topics of business education, entrepreneurship, and personal finance strategies. Follow Patti on twitter @Patti_Conner14.

The views expressed in this article are those of the author and do not reflect the position of bSmartguide.com.  If you require financial advice, you should contact an independent registered financial adviser.  Information provided on and available from this website does not constitute any investment recommendation.  No representation or warranty, express or implied, is given as to the accuracy of the information provided on and available from this website.  Neither we nor the author has taken into account your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs.


Comments (0)

Leave your comments

Posting comment as a guest. Sign up or login to your account.
Attachments (0 / 3)
Share Your Location