Fearless Girl.

The Fearless Girl statue is taking on Wall Street.  The statue was commissioned by State Street Global Advisors to promote gender diversity on Wall Street.[1]  The Fearless Girl was placed in front of the famous Charging Bull statue in what appears to be a powerful standoff.   My bet is with the girl!

The Fearless Girl is standing in the power pose position made famous by Amy Cuddy’s TED Talk. [2]  Her TED Talk has been viewed over 40 million times.  In addition to her talk, she has authored Presence: Bringing Your Boldest Self to Your Biggest Challenges.  Her book is a New York Times best seller.  You should give the power pose a try, it will give you a confidence boost!  Wonder Woman is a fan of the power pose.

My daughter is a fearless girl.  In elementary school, she started riding horses.   She’d hop on a thoroughbred and ride around the ring and across open fields with a reckless abandon.   She showed no fear when she was on the back of a horse.  It didn’t matter if she was jumping over cross rails or making sharp turns around a barrel she rode without fear.

Women are fearless investors as well.   According to a study by Fidelity, women outperformed men over the past decade.[3]  Women tend to rely more on their plan while employing a buy and hold strategy.  In a study by Terrance Odean, professor at Berkeley’s Haas School of Business, men traded 45% more than women during the 1990s and he blamed it on overconfidence.[4]    Trading, combined with a big ego, can destroy your investment results.

Men try to fix everything with a hammer and a screw driver while women will use all the tools in the tool box.  Women are more likely to follow the blue print and ask for help when needed.   As you construct your investment portfolio, use all the tools available so you can achieve financial success.

How can you invest like a fearless girl?

  1. Start with a plan.  Successful women investors start with a plan and, more importantly, stay with it through good times and bad.
  2. Buy and hold. Market timing and excess trading will get you nowhere fast.  A buy and hold strategy will deliver solid long term results.
  3. Reduce risk. In the Fidelity study on women outperforming men, they also did it with less risk.  Adding bonds to your stock account can reduce the risk in your portfolio.
  4. Get help. If you’re lost on the financial highway, pull over and ask for directions.
  5. Diversify. Diversification and asset allocation will help reduce your risk and give you an opportunity to make money across all markets.

The stock market is efficient and it doesn’t care if you’re male or female.   A plan combined with low fees and a diversified portfolio will give you an opportunity to create long term wealth.

So do not fear, for I am with you; do not be dismayed, for I am your God. I will strengthen you and help you; I will uphold you with my righteous right hand.  ~ Isaiah 41:10

Bill Parrott is the President and CEO of Parrott Wealth Management.   For more information on financial planning and investment management, please visit www.parrottwealth.com.

April 24, 2017

[1] https://en.wikipedia.org/wiki/Fearless_Girl, website accessed 4/24/17.

[2] https://www.ted.com/talks/amy_cuddy_your_body_language_shapes_who_you_are, website accessed 4/24/17.

[3] http://money.cnn.com/2017/03/08/investing/women-better-investors-than-men/, Heather Long, March 8, 2017, website accessed 4/24/17.

[4] Ibid.

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