This article is contributed by guest blogger Laura Garfield, a social media and marketing contractor for The Center and the author of The NeXt Revolution, a business book researching the generational behavior of women in the workplace.
No matter your tax bracket or the credentials you have tacked on to the end your name, many women agree on at least this one thing:
Decisions on Investing can feel Overwhelming
I recently sat in on a session about Women and Investing at the Raymond James National Conference. The point was hammered home by Kristin Gibson, the Senior Director of Sales & Strategic Partnerships at Russell Investments. She said in a survey of high net worth women, most described investing as:
These may not be your adjectives of choice. In fact, you may buck the trend and love every nuance of the investing process (I certainly know a few of these women … but can’t claim to be among them). But in general, women want to find a way to make investing not feel like scaling a steep climbing wall in heels and a pencil skirt. Some way to make investing approachable.
Using Your Natural Advantage
Women are naturally strong investors. It’s not a stereotype. Research backs this up. “When it comes to making investment decisions, gender plays a larger role than many people realize,” reports USAToday. Factors like risk aversion, ability to ask for advice, and taking your time … these are all traits that fall on the female side of the gender divide. Research indicates that women investors have these natural advantages:
- Are not over confident
- Are realistic and risk averse
- Research more and ask questions
When it comes to behavioral economics, the Washington Post interviewed Terry Odean, a University of California professor who has studied stock picking by gender for more than two decades. In a seven-year study, Odean found single female investors outperformed single men by 2.3 percent while female investment groups outperformed male counterparts by 4.6 percent. Odean told the Washington Post, “In our research, male investors traded 45 percent more than female investors. Men are just making a lot more bad decisions than women. More trading leads to lower performance.”
Finding the Right Ear
So back to the Overwhelming/Complicated/Boring/Latin part of the investing equation, if you’re going to flip those adjectives with a boost from your feminine advantage, you may need some help. A key to that is picking the right investment advisor. Research shows that women and men gather information about investing differently.
- Women want better communication, the chance to say what they mean
- Women build trust by collaborating & sharing information
In Kristin Gibson’s session at the conference, she summed up what most women are looking for in a financial advisor like this:
“I want someone who understands my situation.”
Whether that’s a man or a woman shouldn’t matter. What does matter is how well the advisor can listen, communicate and understand your needs. You may be looking for “straightforward” or you might want someone who is “motivational”. Whatever your word, when you find the best fit, that advisor will help you translate “investing” from Latin into English. If they can turn “boring” into “captivating” then you’ve really found a keeper.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Laura Garfield and those cited/quoted and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Raymond James is not affiliated with and does not endorse the services of Laura Garfield, Kristin Gibson or Russell Investments. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Past performance is not a guarantee of future results.
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