Being involved with a company that trains people how to actively trade in the stock market. I get to see first hand the success or failure of our clients. Eighty percent of our clients are male. But I'd wager that eighty percent of the successful stock traders are women.

Based on this experience, I began to wonder why is it that women tend to be better investors than men. I thought about it over and over, and I could not ignore the facts. Women make successful investors.

But why? I think it comes down to three simple words: EGO, EGO, EGO. The one thing that most men have in common is a big ego. Men tend to let their egos make their decisions for them. They hold when they should sell. They buy in for fear of missing out on that one big opportunity. In other words, they invest not to get the best deal out of the market but invest so that they look good (or not look bad).

Usually when people think of investing, they think of taking chances and risks. But the truth is that investing has much more to do with emotional intelligence than most people realize. Emotional intelligence is the ability to think objectively about a situation and not get too emotionally involved in it. Women, in general, possess a high emotional intelligence.

This quality makes women great investors. Rather than investing according to what will make them look good, women will invest according to a plan--not according to what mood they are in or whether they will be "right" or "wrong".

Investing is not about being right or wrong. It's about making money. Women are able to put their egos aside in ways men have trouble doing. This ability to set their ego aside makes women great investors.

Need proof? Ask yourself this: if a man and a woman are lost on a trip, who is more likely to stop and ask for directions? Women are more likely to ask investment questions until they completely understand the concepts. Men, on the other hand, can be too afraid to ask the necessary questions because he may look bad doing so. Women tend to come to investing with a mind to learn. And when they learn, they execute solid plans. Men can be heard saying they "know that a company is good", whereas women can usually tell you why the company is good.

As more and more women turn to investing, I think we will see this trend of women outperforming men. A woman's ability to put her ego aside already gives her the upper hand in investment strategy.

And because women on average still get paid less than men (a situation that needs to change--pronto!), women can use their inherent advantages to invest more and work less. So men can go out, work hard, and earn a lot of money, whereas women can invest more, work less, and earn a lot more money.
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