In Malaysia, investing has traditionally been seen as a male-dominated space, but times are changing. More Malaysian women are getting into investing, and research suggests they might actually be better at it. The Covid-19 pandemic served as a turning point, prompting a surge in female participation in the stock market. According to Bursa Malaysia, the number of new Central Depository System (CDS) accounts opened by women investors jumped by 110.63% in 2020, with 85,094 new accounts compared to just 40,398 in the previous year.
A study conducted by Bursa Malaysia found that women investors, on average, realized higher gains than male investors, debunking the stereotype that women are less savvy in financial decision-making. With financial literacy campaigns, increased digital accessibility, and a stronger emphasis on wealth management, women are proving that they can hold their own in the investment world.
But what exactly makes them different? And what can both men and women learn from each other’s financial habits?
Risk Appetite: The Daredevil vs. The Strategist
One of the biggest differences between male and female investors is how they handle risk. Studies, such as the well-known research by Barber and Odean, have consistently shown that men tend to take more financial risks than women. This makes sense, as many men are drawn to high-risk, high-reward investments like stocks, cryptocurrency, and forex trading. The thrill of potentially striking it big drives their decisions, sometimes leading them to jump into opportunities without fully considering the downside.
Women, on the other hand, are generally more risk-averse. They prefer investments that offer stability, such as Amanah Saham funds, real estate, or gold. But don’t mistake caution for weakness, as this measured approach often leads to better long-term returns. A study from Bursa Malaysia found that female investors trade 50% less frequently than men, which reduces transaction costs and minimizes losses due to impulsive decisions. Meanwhile, the 36% increase in female trading accounts in Malaysia in 2021 signals a shift in financial independence.
Research and Strategy: The Detective vs. The Quickdraw
When it comes to making financial decisions, women tend to dig deep. Studies show that women investors take more time to research their options, cross-check data, and consult experts before making a move. This aligns with findings from the UNSW Business School, which highlight that women are better at aligning their investments with long-term financial goals.
Men, on the other hand, often jump in quickly. While this decisiveness can sometimes lead to grabbing hot opportunities, it also increases the risk of falling into investment traps. A separate study by the University of California, Berkeley, found that men trade 45% more frequently than women, often overestimating their ability to time the market. The result? More fees, more stress, and usually, lower returns.
Trading Habits: Stability vs. The Tinkerer
Women are known for their patience, and that pays off in investing. They are more likely to buy and hold, weathering market fluctuations with a steady hand. This “set it and forget it” strategy helps them avoid unnecessary trading fees and prevents panic selling when the market takes a dip. The NY Times highlighted that frequent trading reduces men’s net returns by 2.65% per year, compared to 1.72% for women.
Men, meanwhile, love to tweak their portfolios. They often try to outsmart the market, switching up their investments frequently. While this can sometimes lead to short-term gains, it often results in lower overall returns due to trading fees and emotional decision-making. As the saying goes, “Time in the market beats timing the market.” Women seem to understand this better.
The Rise of Women Investors in Malaysia
The narrative of female investors lagging behind their male counterparts is being rewritten in Malaysia. The Covid-19 pandemic served as a turning point, prompting a surge in female participation in the stock market. According to Bursa Malaysia, the number of new Central Depository System (CDS) accounts opened by female investors jumped by 110.63% in 2020, with 85,094 new accounts compared to just 40,398 in the previous year. While the number dipped slightly to 76,164 in 2021, it remained significantly higher than pre-pandemic levels.
Moreover, women’s average daily traded value (ADTV) in 2020 and 2021 saw a significant increase, reaching RM799.7 million and RM712.4 million, respectively. This is a stark contrast to RM258 million and RM239.5 million recorded in 2018 and 2019, highlighting the growing confidence of female investors in navigating financial markets.
Interestingly, research suggests that Malaysian women tend to generate higher investment returns than their male counterparts. A study conducted by Bursa Malaysia during the Movement Control Order (MCO) period found that female investors, on average, realized higher gains than male investors, debunking the stereotype that women are less savvy in financial decision-making. This aligns with global findings, such as Fidelity Investment’s 2021 Women and Investing Study, which revealed that women outperformed men by 0.4% annually over a 10-year period.
A study by wealth management platform StashAway reveals that women investors are more consistent than men, staying invested 1.22 times more over 20 months and 1.18 times more likely to remain invested than their male counterparts. Women are also less likely to withdraw their investments or close their accounts, indicating a more disciplined and long-term approach to wealth-building. Interestingly, men check their investments 1.5 times more often than women, suggesting that women are less reactionary and more confident in their financial decisions.
What Drives This Shift?
Several key factors contribute to the rise of female investors in Malaysia:
- Increased Workforce Participation: More women are joining the workforce, leading to greater financial independence and investment activity. However, with only 55.8% of Malaysian women in the labor force compared to 81.9% of men, there remains untapped economic potential.
- Financial Literacy Growth: Women are becoming more financially literate, with better access to educational resources and investment knowledge.
- Preference for Strategic Investments: Malaysian female investors demonstrate a more cautious and research-driven approach. Unlike men, who may be drawn to high-risk speculative trades, women are more likely to conduct thorough research before investing.
- Green and ESG Investments: A growing number of Malaysian women are turning to sustainable investments, such as green funds and socially responsible investment portfolios, aligning their financial strategies with ethical considerations.
This shift is more than just a win for women; it is an economic opportunity for Malaysia. Studies show that removing barriers to women’s financial participation could increase Malaysia’s income per capita by 26.2%, translating to an average income gain of RM9,400 per person. Encouraging more women to invest and participate in wealth creation could be a game-changer for Malaysia’s economic growth.
The financial world is changing, and Malaysian women are taking charge of their wealth like never before. Data from Bursa Malaysia shows that there was a 194% increase in female trading volumes between 2018 and 2021, indicating growing confidence among women in handling investments.
Another fascinating shift is women’s increasing interest in automated investment platforms and green finance. Research shows they are more likely to embrace financial technology and prioritize sustainable investments, putting their money where their values are. The growing awareness of ESG (Environmental, Social, and Governance) investing has also been more prevalent among female investors in Malaysia.
The Verdict: Who’s the Better Investor?
If we’re judging based purely on average returns, studies lean in favour of women. Their patience, discipline, and long-term perspective often result in stronger financial outcomes. But that doesn’t mean men don’t excel at investing, after all, some of the world’s most successful investors are men. The real key is to blend the best of both worlds:
Rather than seeing investing as a competition, there’s value in blending the best of both approaches. Men can benefit from adopting a more patient, research-driven investment mindset, resisting the urge to trade impulsively. On the other hand, women can gain an edge by embracing a bit more risk, seizing high-potential opportunities, and expanding their investment horizons. A balanced approach, combining strategic risk-taking with disciplined decision-making could ultimately lead to stronger financial outcomes for all investors.
At the end of the day, investing isn’t about gender; it’s about strategy, knowledge, and discipline. Whether you’re a risk-loving investor looking for the next big thing or a cautious planner focused on steady growth, the best approach is the one that aligns with your financial goals and risk tolerance. Smart investing is about making informed decisions, staying consistent, and knowing when to adapt.
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