In my opinion, investors should be wary of most “hot” trends to avoid getting burnt. “Hot” usually equates to “hyped” and in high demand, which also means higher prices to pay or higher risk to bear. A contrarian would argue that cold investment ideas produce the best results.
That said, I’d like to offer an investment idea whose time has come, though it is hardly hot: Look for companies with more women on their executive teams.
Rather than being wary of the latest “craze,” investors would do well to become aware of the now-proven fact that companies with higher representation of women on their corporate boards and at key executive levels outperform those with low female representation. In particular, such companies are seeing better returns on sales, higher returns on equity, and higher returns on invested capital, studies have shown. Firms that proactively support and advance women to leadership ranks are not only doing the “right thing” in terms of gender equality, they are doing right by their shareholders and stakeholders.
Follow the money, and it could well lead you to women.