How Investing Habits Differ Between Men and Women

Written by Jeff Helms

The financial world is complex and constantly changing. Those changes can impact our clients and their plans for the future. As the firms founder and Managing Partner, making sense of these changes is my job. We try to simplify communication on market dynamics to make it meaningful and useful for our clients.

June 10, 2015


How Investing Habits Differ Between Men and Women-media-1

For years, financial institutions and academics have studied the respective investing habits of men and women. In general, these studies suggest that men invest with more confidence and women tend to focus more on investing for goals and objectives and less on transactions. Women, for instance, tend to invest more in target date funds in their retirement plans at work, while men tend to pick specific options for their retirement accounts, according to Vanguard Group studies.

Men Tend to Trade More Often than Women

Interestingly, both men and women tend to end up with the same mix – about 73% stocks and 27% bonds. Men also tend to trade more, which can be a disadvantage. A recent Vanguard study showed 11% of men made an exchange of funds in their retirement accounts in 2014 compared with 7% of women. By trading less often, women are less likely to exchange at the wrong time, according to Jean Young, a senior research analyst at Vanguard.

Women Are More Risk Averse than Men

When it comes to non-retirement assets, women tend to be much more risk averse than men. Studies by Blackrock and Merrill Lynch show that women have a greater proportion of their investment assets in cash than men, resulting lower overall returns.

Women are also more likely to seek out expert guidance than men. Fidelity has found that, on average, 42% of women use professionally managed accounts where only 36% of men choose to get help. Other Fidelity studies show that 92% of women want to learn more about financial planning and 83% want to get more involved with their finances in the next year.

None Of Us Are As Smart As All Of Us

By learning from each other’s best habits, investors of both sexes can benefit. Indeed, none of us are as smart as all of us! No matter where you are in your retirement planning, give us a call today for your financial check-up. We can provide an in-depth analysis of your retirement accounts and get you on the right track to having financial security in your golden years.