Thrifty Thinking: Secrets of Women Investors

How are women investors different from their male counterparts? For starters, they do more research and they panic less. And guess what—they get better results. This timely topic is explored in depth in the cover story of Kiplinger’s Personal Finance magazine’s April issue, which hits newsstands March 8. The cover story is available online, along with Kiplinger’s related reader survey.

 

“Research shows that women tend to differ from men in their approach to investing,” said Janet Bodnar, Editor, Kiplinger’s Personal Finance. “We titled the story ‘The Secrets of Women Investors,’ but we might easily

have added ‘and How They Can Make You Rich’ in parentheses.”

 

As part of Kiplinger’s special report, the magazine asked a group of accomplished women on Wall Street to share their investing advice. The tips—which include invest in what you know, temper risk, think long term, trade sparingly, sell with discipline, rehearse your script and work with a team—are all explained in the report. 

 

Further, the magazine partnered with InvestmentNews to survey Kiplinger’s readers via email. More than 1,500 surveys were completed, almost evenly divided between men (53%) and women (47%).

Some noteworthy results:

·         Nearly 90% of respondents said they primarily learn about personal finance from financial publications and websites. In addition, women are more likely than men to ask questions of a financial adviser (26% to 20%) or talk to friends and family (10% to 4%), and men are more likely to watch financial news on TV (27% to 20%),

·         Men were more likely than women to say they have an above-average risk tolerance (39% to 29%). But among un­married women with a high net worth ($750,000 or more in investible assets), a larger percentage—41%—said their risk tolerance is above average.

·         Women were more likely than men to say their number-one personal finan­cial goal is to “retire with financial security and peace of mind” (52% ver­sus 45%). Men are more interested than women in leaving a legacy for future generations (15% versus 8%).

·         Among women, 39% currently use a financial adviser, compared with 35% of men. And women are more likely than men to value the adviser’s ser­vices in planning retirement income (64% versus 59%).

 

Additionally, an analysis of the 60,000 users of Openfolio, an online investment-sharing platform, found that in 2014, a stellar year for the markets, the women investors it tracks outpaced their male peers by an average of 0.4 percentage point. In 2015, a down year for markets, women lost an average of 2.5%, compared with a loss of 3.8% for men. In both years, women achieved their results with smaller swings than men experienced.

 

To give equal time, Kiplinger’s also includes a sidebar on the strengths of male investors. “Together, men and women make a socko combination,” said Bodnar.