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Money Management Newsletter: General Interest
Investment habits of men vs. women

By The Money Management Editor
Money Management Newsletter, September 2003

Here's an interesting point of debate: men and women differ in their approach to the investment game. and the difference is quite marked during the initial process.

Research has shown that men tend not to want too much detail while women want more information. Women tend to really want to understand what's being suggested, and why. A poll conducted in the U.S. in the late 1990s found that women spend 40% more time researching a mutual fund before they invest. What's more, they tend to be less impulsive and less inclined to act on a hot tip than men are. It also found women to be less confident in their investing abilities than men. Only 56% of women feel confident about their investing abilities versus 64% of men.

Another study, out of the University of California, looked at the investment records of 35,000 households with accounts at local brokerage houses throughout most of the 1990s. The first finding was that men traded more often than women. Men in the study group, on average, turned their portfolios over by 6.4% each month (or 77% annually) while women turned their portfolios over by 4.4% each month (53% annually). It also found that while both groups would have done better by holding onto the stocks they had at the beginning of the year, men tended to have lower returns at the end of the year than women.

Still another survey (abet from the U.S.) tells of women doing better for themselves than men when it came to money. The study of 1,000 men and an equal number of women found that 62% of the women balanced the chequebook; 58% paid the bills. But when asked to make the investment decisions, only 15% of the women said they alone had the sole responsibility. (Men were apparently not asked.) 44% of the women indicated that they balanced a budget themselves; only 23 % of the men did it.

As an aside..

A life insurance study (limited to medical practitioners) indicated that only 1 in 9 widows will re-marry. This is important to know (if true) because some men think they don't need much life insurance because they feel that if they die their wife will re-marry. However, a single mom who is trying to hold down a full time job to make ends meet, or an older spouse who has been a housewife for many years, may not move in the right circles to find a new husband. On the other hand, given the above study results on investment and budget skills, a widow who is left a life insurance inheritance may be able to successfully manage her financial affairs if she has enough money to work with and may not look to remarry.

If the above study results can be applied to the general population it would seem that family units would do well to involve the the female spouse both in investment and succession planning.