I've always sensed that women make better investors than men. Call me politically incorrect but when I talk to a woman about investing, she's focused on protecting her savings, not using it to make more money. Women don't think about "beating the market." They think about being safe. They don't want to make a mistake and avoiding mistakes is sometimes what makes all the difference in getting investment returns. And women are less prone to trading and more attuned to buying and holding. As Warren Buffett says, "Activity is the enemy of performance."

Maybe it's our testosterone that drives us to turn investing into a championship sporting event. I don't know. But I've felt that the male competitive spirit often is the very thing that drives us into stupid investments.

Until recently, I couldn't put my finger on how our male "Y" chromosome puts us at a genetic disadvantage to women. However, I recently discovered that Brad Barber and Terrance Odean of UC Davis validated my intuition. They published an article in the February 2001 issue of The Quarterly Journal of Economics titled "Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment."

Barber and Odean obtained trading data from a discount brokerage for over 35,000 households and analyzed investing patterns for six years to test whether overconfidence leads to more trading and lower returns. Since in areas of finance psychologists have proven that men tend to be more prone to overconfidence, the genders were separated so that their trading habits could be studied individually.

The study concluded that men are overconfident "about their abilities, their knowledge and their future prospects." Men have a high propensity to mistakenly believe they know something that no one else does -- that they have an edge. This belief leads to more trading than women which lowers returns.

Here's what shocked me. Men traded 45% more than women and reduced their net returns by 2.65 percentage points per year. From 1925 to 2003, stocks appreciated 10.4% yearly. This means men's investment returns were about 25% less than women's.

If you compound this 25% difference over 20 years, a man will have a nest egg worth 40% less than a woman's.

Attention women! You may be "wired" to do better as investors. Take control of that 401K or IRA and start investing with patience and caution. It may mean the difference between a good retirement and one where you're still working.

Mitch Tuchman is founder of MarketRiders where investors use free software to invest without brokers and advisers and their expensive fees -- in just a few hours a year.