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A column (subscription required) in today's Wall Street Journal looks at an interesting question that has received more attention from the world of academia lately: How do men and women invest differently, and who invests better?

A few general truths: women tend to be much more cautious as investors, while men are overconfident (Big surprise?) and brash, more willing to take substantial risks. Thus, men tend to devote a larger chunk of their portfolios to equities, while women prefer a big concentration of bonds.

Men also tend to trade more frequently, highly confident in their ability to outsmart the market. In this regard, women are more rational.

The jury is still out on who's a better investor -- Men hurt themselves with over trading, but make up some of it with a willingness to invest in stocks. In 2005, Merrill Lynch found that women are better investors. A British study reached similar conclusions.

The field of behavioral finance and neuroeconomics is a fascinating one, focusing on tricks our brains play on us that make us bad investors. Check out Jason Zweig's book Your Money & Your Brain.

Which sex invests better? originally appeared on BloggingStocks on Wed, 06 Feb 2008 16:00:00 EST. Please see our terms for use of feeds.

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