Why Women Are Better at Everything

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Recently in the Wall Street Journal, MarketWatch columnist David Weidner noted that women “do almost everything better” than men — from politics to corporate management to investing.

Weidner cites a new study by Barclays Wealth and Ledbury Research, which found that women were more likely than men to make money in the market, mostly because they didn’t take as many risks. And why are they risk-averse? Because they’re not as overconfident as men, the study found.

The study’s findings backed up those of previous research on the topic: in a 2001 study [PDF] of 35,000 American households with an account at a discount brokerage, financial scholars Brad Barber and Terrance Odean found that women’s risk-adjusted returns beat men’s by 1% annually. A 2005 study by Merrill Lynch found that 35% of women held an investment too long, compared with 47% of men. More recently, in 2009, a study by the mutual fund company Vanguard involving 2.7 million personal investors concluded that during the recent financial crisis, men were more likely than women to sell shares of stocks at all-time lows, leading to bigger losses among male traders. It also meant fewer gains when some of the stock values began to rise again.

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What’s the problem with men? “There’s been a lot of academic research suggesting that men think they know what they’re doing, even when they really don’t know what they’re doing,” John Ameriks, the author of the Vanguard study, told the New York Times.

The reason for that overconfidence may come down to biology, research suggests. There’s a growing field of study called “neuroeconomics,” in which scientists are examining the link between hormonal and neurological impulses and financial decision-making. One such recent study by John Coates, a research fellow in neuroscience and finance at Cambridge University, tested male traders’ hormone responses to workplace decisions. He found that testosterone — the stuff that makes men, well, men — surges during winning streaks. And that may drive both risk-taking and an attitude of infallibility.

The so-called “winner effect,” which has been seen in athletes during competition, also seems to apply to male traders. As the U.K.’s Guardian explained:

This occurs when two males enter a competition and their testosterone levels rise, increasing their muscle mass and the ability of the blood to carry oxygen. It also enhances their appetite for risk. Much of this testosterone stays in the system of the winner of a competition, while the loser’s testosterone melts away fast; in evolutionary terms, the loser retires to the woods to lick his wounds. In the next round of competition, though, the winner already has high levels of testosterone, so he starts with an advantage, and this continues to reinforce itself.

“Steroids,” Coates explains, “like most chemicals in your body, display what is called an inverted U-shaped response curve.” That is to say, when you have low levels of them you lack vitality, and do very poorly at mental and physical tasks. But as the levels rise you get sharper and more focused until you reach an optimum. The key thing is this, however: “If you keep winning, your testosterone level goes past that peak and sliding down the other side. You start doing stupid things. When that happens to animals, they go out in the open too much. They pick too many fights. They neglect parenting duties. And they patrol areas that are too large.” In short, they behave like traders on a roll; they get cocky.

Women, who have only 10% of the testosterone that men have, seem inured to the phenomenon, according to Coates. He is currently studying the small group of women who make their living on the trading floors of New York City — but because there are so few of them, he hasn’t amassed enough data to make any conclusions about the way their hormones and chemistry may affect behavior.

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“We know that opinion diversity is crucial to stable markets,” Coates told the Guardian. “What no one talks about is endocrine diversity, a diversity of hormones.” It’s an unorthodox concept, but Coates believes it’s worth investigating.

So, basically, the more women around, the better, as the Journal‘s Wiedner said. His column referred to a recent book by Dan Abrams called Man Down: Proof Beyond a Reasonable Doubt That Women Are Better Cops, Drivers, Gamblers, Spies, World Leaders, Beer Tasters, Hedge Fund Managers, and Just About Everything Else. Wiedner wrote:

As Abrams notes, women are better soldiers because they complain about pain less. They’re less likely to be hit by lightning because they’re not stupid enough to stand outside in a storm. They remember words and faces better. They’re better spies because they’re better at getting people to talk candidly.

Of course, to most women none of this is much of a revelation.

MORE: Job Equality: Stressful Work Raises Women’s Risk of Heart Disease Too

10 comments
nick7588
nick7588

Terrible journalism really. This is plain and simple gloating. There is obviously no changing your misandrist perspective on the world. But if you are really such a female supremacist, why the need to blatantly gloat over your supposed findings. It is inappropriate, as ignorant people will read this and take as fact. The feminist movement used to be about equality, these days it's all about female supremacy. Just like there were black white supremacist, there are also male's the are strongly female supremacist. Inequality in any form is unacceptable in America, stop trying to rally an already fervent base into further leveling the playing field. In order to be a great society the best candidate and person should win the job, competition, or whatever. It shouldn't matter if you are a man, woman, black, white, old, or young. America is ideally a meritocracy. If we purposely discourage male success, while supplying and supporting less qualified candidates because of the sex is unfair. And will inure to the eventual fall of America just as Rome. When the competition is lowered and mediocrity is celebrated the decline is unavoidable. We like to think we live in a different world, but as it always has throughout history the most powerful person, country, or corporation wins and asserts his power over the weaker. By weakening our men, and unjustly promoting women we are weakening our power as a society. We ought the strengthen women and men to their highest potential, not try to assert one as better than the other.

dufflerpud
dufflerpud

This is appalling journalism and shows just how far Time has fallen.

First off, if you have a small number of samples on the trading floor, you have to ask if maybe there is something extraordinary about them just for being there.  That is, there are other characteristics (confounding factors) that you aren't taking account of - any SCIENTIST would ask that.  Perhaps it's extra hard to get on the trader's floor if you're a woman, so by the time you get there, your especially good, or maybe it's something about high heel shoes - but no, we're just going to get raw conjecture.

Raw, SEXIST conjecture.

So, I put it to you:  "What else would I expect from a female reporter?"

It's just as valid, just as researched, and just as appropriate in a news forum.

The only difference is that I KNOW IT'S WRONG and you don't seem to.

Gekisen
Gekisen

This is unbelievable!  What bigotry.  I'm surprised that such an esteemed magazine such as time would allow such an article.

LeeAvery
LeeAvery

I think they need to step up and prove it with actions and not words. Even with "positive discrimination" they still fall back on the same old excuses. There is never any proof to back up the ridiculous statements in such bigoted articles. Is anybody else tired of hearing this ?

craigjwallace
craigjwallace

terrifying journalism. Firstly, replace 'women' with any skin color. Or with 'men'. Secondly, the scientific studies which demonstrate testosterone's advantages in situations and careers just so happened not to be summarised.  It would be pretty laughable were it not so bigoted. What has happened to 'Time' ?

DemianGatins
DemianGatins

What appears to be demonstrated is that the women who choose to compete in the workplace (is that a wide cross section?) are doing better than their male counterparts because of a lack of testosterone, not a real surprise to a guy. However, there are fields that are wholly dominated by males (mathematics, engineering) in which a fully testosterone shifted brain has an advantage, but these are the minority. Still, if one looks at what is necessary for the species, not the gender, female must always come out on top.


Camila
Camila

What a horribly bigoted article.  The author should be ashamed of herself.  If men are such bad investors, then why are the most successful money managers men?  What an idiot this woman is.

Mewt
Mewt

Didn't read, lol.

charlie_whisky_111
charlie_whisky_111

Why does the western media hate males so much? There will always be somethings that women are better at and vice-versa. But it serms slmost illegal now to celebrate a successful male trait, whilst it is encouraged to enforce gender supremacy on behalf of women. Articles of the type above -- and the condescending, bigotted tone of the journalist really offends me.

DavidAuCoin
DavidAuCoin

It seems that male bashing is all the rage these days. The amazing thing is that there doesn't seem to be any shortage of men getting the word out  that they are inferior to women. Why can't people who write these blogs simply say women are as good as men? You never see it written that women can do everything a man can do but what they have to tack on the words and sometimes better. Come on guys stop being so proud of your inferiority.