Male investors are more likely to withdraw cash in a volatile market

4 July 2018

Most investors don’t waver from their investment strategy during periods of market volatility but if they do, men are four times more likely to withdraw money from their investments than women, according to recent analysis of investment data.

In the past six years, there has been significant UK Equity market volatility attributed to four major events: worries about Greek debt (June 2013), the Scottish Independence Referendum (October 2014), the China market bubble (September 2015), and 2018’s market correction (February 2018). During this period, analysis by Nutmeg found that each event involves, on average, a loss of 8.7% on the FTSE100 over a four-week period.

Analysts from the online wealth management firm found that anonymous data on its investors’ behaviour, from September 2012 to March 2018, found that, on average, 97.6% of investors do nothing, with female investors more likely to weather the storm. Meanwhile, 2% of investors will adjust the risk tolerance of their portfolios, with more increasing their risk level than decreasing it.

However, 0.4% of investors will withdraw their investment, with men four times more likely to fully withdraw their cash than female investors.

Shaun Port, chief investment officer at Nutmeg, says: “Knowing what to do when the markets dip can be hard – there is an understandable temptation to tinker with your investments. It’s good to see that female investors are staying the course during periods of market volatility – this is likely to put them in a better financial position in the long-term. The golden rule of investing remains true during market dips: if you’ve set long-term investment goals, don’t let short-term market movements send you off course.”

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