How Men And Women Invest Differently

In a series of posts on the BlackRock blog, Nelli Oster describes how
gender impacts investment behaviour.

Oster finds three major differences between how men and women invest. From BlackRock:

  • Women tend to focus more on longer-term, non-monetary goals.As this Fidelity investment guide lays out, women generally associate money with security, independence and the quality of their and their families’ lives. According to a 2010 Boston Consulting Group study examining women’s experiences with wealth management providers, women tend to focus on longer-horizon planning, like college savings. Men, on the other hand, who tend to be more competitive and thrill-seeking by nature, often focus on the short-term track records of their portfolios.
  • Women tend to be thorough and take more time to make decisions than men. Several studies, including a national survey by LPL Financial, show that women tend to research investments in depth before making portfolio decisions, and the process, as a result, tends to take more time. Women also tend to be more patient as investors and consult their advisors before adjusting their portfolio positioning, whereas men are more prone to market timing impulses. To gather information, women often prefer group discussions to men’s more independent learning approach.
  • Women seek help more. A 2012-2013 Prudential study on women investors reveals that women are more receptive to financial research and advice than men. They often require more of a financial advisor’s time and resources, but once trust is established they are also more loyal clients with their focus on lasting relationships.

“Both men and women should make sure that their investment styles and horizons match their overall financial goals,” she concludes. “For women, this may mean taking on more risk. For men, this may mean focusing more on longer-horizon goals, rather than on short-term trading track records.”

Read the full post at BlackRock »

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