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