Gender
How does a person's gender affect their tendency to make risky stock market decisions?
Overtrading
Men often trade too often, indicating a high level of overconfidence and a tendency to take more risks. A study by Barber and Odean in 2001 found that men trade 45% more frequently than women, and their return on investment decreases by over a percentage point when compared to women because of this.
Direct Effects of Testosterone
In a study by Cueva, Roberts, et. al, various young men were given either testosterone or a placebo and then made stock market choices in a simulation. Those who were given testosterone increased their risky investments by 88%. This demonstrates a strong correlation between testosterone levels themselves and risky stock market decisions. Since men have higher testosterone levels, this clearly demonstrates that men are much more likely to make risky stock market decisions than women are.
Men are far more likely to make risky stock market decisions, as various studies show a correlation between either the male gender or testosterone levels and more financial risk.
Individual Stocks and Bonds
A 2014 study by the Boston Consulting Group found that men allocate over 13% more of their portfolios to individual stocks and bonds than women do. This indicates that women are more risk averse than men in the stock market because they are less willing to place their money in individual stocks and bonds.
Mutual Funds and Other Investments
Individual Stocks and Bonds
Women
Men
Mutual Funds and Other Investments
Individual Stocks and Bonds