For years there's been plenty of talk -- and research -- on the role of women in the business world and as investors. The latest findings still point to a gap between the needs, attitudes and involvement of men and women in investing. Yet, at the same time, women are making more progress than ever as professionals.
So, especially for those who follow principles in my book "The Millionaire Zone," I wanted to share my thoughts on why the gap still exists and what you as an investor can do about it.
According to the research organization Catalyst, women now occupy 50.6% of workplace managerial and professional positions. Yet as investors, women still don't get involved or they invest too conservatively, leaving money on the table.
- Education. Women growing up are simply not socialized as investors. According to Oppenheimer, 76% of women wish they had learned more about investing while growing up.
- Experience. Most women don't take the investing helm when married.
- Fear. According to Allianz, some 90% of women fear "losing it all," and even 48% of those with incomes exceeding $100,000 annually cite that fear.
- Adviser disconnect. Most financial advisers are men, and they're still geared to talk to men. According to Sacha Millstone, a founding financial adviser for the Millstone Evans Group at Raymond James, most advisers still talk in jargon. "'Basis points' still don't mean as much as percentages," Millstone says. And there's still a "tendency to tell women what they want to hear, to comfort them, instead of talking about the opportunities in a situation."
It's obvious: Women need to "connect" with investing because we live longer. Through death or divorce, we are more likely to spend more time in control of our financial destiny. About 80% to 90% of women will be solely responsible for their finances someday, according to the National Center for Women and Retirement Research.
And with no defined benefit pension to count on.
And I'll bet you didn't realize this: Allianz found that 96% of men think that financially secure women are sexy.
The good newsCurrent trends and research point to some good news, too.
First, Allianz reported that more women than ever describe themselves as "confident, analytical and disciplined savers." Further, according to Oppenheimer, 46% of women now consider themselves "very or somewhat knowledgeable about investing."
Second, women have always had less ego in their investing approach. As a result they often outperform men, particularly those who have short-term, aggressive investing styles.
Finally, women also are willing to network and use the investment-club approach. About 70% of investment-club members are women.
4 ways to get startedI think the following points will help all investors, but especially women who may still be reluctant to wade into investing waters:
- Think like a business owner. Business owners understand how businesses work and how to handle the ups and downs. Women are good at this in the business world. According to Millstone: "Women can handle negative news in a business setting, but it brings fear in investing. There's no reason for it."
- Buy businesses you understand. If inclined to buy individual stocks, this is a fundamental Warren Buffett value principle. As a woman, you probably understand some businesses better than your male counterparts -- use this to your advantage.
- Get the right advice. Research shows that women prefer the help of advisers. Some 75% of women who rely on advisers are "more comfortable with investing." That said, finding the right one is important -- one tuned in to the needs of women.
- Follow role models. In business -- and in investing -- it always helps to find good role models and to study their actions and response to business and market stimuli. Buffett, an investor role model for years, is a good place to start.
Interestingly, a study of the Fortune 500 companies by Catalyst found that companies with more women at the top delivered a higher return -- 34% higher -- than companies with the fewest women. That's another reason women might find a greater connection to investing in the market.
This article was reported and written by Jennifer Openshaw for MarketWatch.com.