Invest like how a girl does.!

Warren Buffet is undoubtedly the best man when it comes to making Investments. It is popularly said that his hands have a Midas touch and whichever investments he makes; it earns him a healthy profit. As per Forbes, Warren Buffet’s wealth has been estimated at a whopping 50 billion dollars (as of March 2011) and all of his wealth has been made through Investments.

But how does Warren Buffet do so? What is his Investment style that makes him unique and which no-one has been able to replicate since decades? A recent study conducted by LouAnn Lofton who studied the habits of the world’s most renowned investor has revealed that Warren Buffet’s investing style can be correlated to that of a woman. 'Yes, you read it right, Warren Buffet has a Feminine Investing Style.'

The Researcher of this study has also authored a book on this study by the name – ‘Warren Buffet Invests like a Girl’. By the way, some of the most interesting recent studies have just begun to uncover the role of testosterone in investing, risk taking and trading. You're not shocked to hear it has one, are you?

The key here is that women's trading hurt their performance less than men's, thanks to men's greater Overconfidence. The difference, then, is more related to temperament than it is to skill. You can be the smartest securities analyst around, but not having the correct mindset can absolutely sink you as an investor. All the know-how in the world can't correct for bad habits. Temperament matters, plain and simple.

How does the issue of overconfidence play into investing behavior and results? Well, because of their overconfidence, it was assumed correctly, as it turned out that men would trade more than women do. And what does more frequent trading do to your investment results? It drags them down, running up transaction costs and acting like the proverbial albatross on what might otherwise be smart investment decisions.

The Eight traits female investors share with Warren Buffett: 

1. Trade less than men do.

2. Exhibit less overconfidence: men think they know more than they do, while women are more likely to know what they don't know.

3. Shun risk more than male investors do.

4. Be less optimistic, and therefore more realistic, than their male counterparts.

5. Put in more time and effort researching possible investments, considering every angle and detail, as well as considering alternate points of view.

6. Be more immune to peer pressure and tend to make decisions the same way regardless of who's watching.

7. They learn from their mistakes, men don’t.

8. Have less testosterone than men do, making them less willing to take extreme risks, which, in turn, could lead to less extreme market cycles.

Food for thought:- Investing isn't a man's world anymore—and that's a good thing for individual portfolios, Dalal Street, and the world's financial system. "After all, the stock market is filled with individuals who know the price of everything, but the value of nothing."