Women make better investors, if only more of them had a go
– Claer Barrett is associate editor of the Investors Chronicle. The opinions expressed are her own.Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in.–
“I’m sorry to tell you that my husband has died, so I want a full refund on his Investors Chronicle subscription.”
It is a sad fact of life, but for a magazine with a high number of elderly male readers, we receive two calls from bereaved widows every week. No doubt, scrupulous management of the family budget over the years has honed their cost-cutting skills. But I secretly wish they would switch the subscription to their own name, and have the confidence to carry on investing in their own right.
It may sound harsh – but I am a firm believer that women make better investors than men. I learned my financial lessons from my mother and grandmother, who battled through the austerity of the post-war years. The concepts of rationing, make do and mend and digging for victory are the epitome of financial prudence. “Look after the pennies,” I was told, “and the pounds will look after themselves.”
My mum never had a credit card – she saved up for big purchases. All of my birthday and Christmas money was squirreled away into high interest building society accounts. When I bought my first flat in London, aged 25, she was delighted that I was not “frittering money away on rent”.
Yet my mother has never had a stock broker, or directly invested in equities. Her reasoning is quite valid – she won’t put money into something she doesn’t understand. The stock market may be seen as a male domain, but with a bit of research, it’s not difficult to understand. So why don’t more women have a go?
Limited research studies on the subject show that women are more cautious investors. Men are more likely to chase profits, it is said, whereas women want to minimise the likelihood of a loss. If shares held in a company start to tank, women are more likely to cut their losses and move on, whereas men will hang on for longer in the hope of a loss-restoring bounce.
For this reason, Harriet Harman famously speculated that if Lehman Brothers was Lehman Sisters, it may still exist today. Lehman Brothers & Sisters might be a more equalitarian goal. As things stand, only 5 out of 61 seats on the boards of UK banks are occupied by women.
I am proud to report that half of the senior editorial team at the Investors Chronicle is female. I only wish we had such a gender balance amongst our readership – less than 10 per cent are female. However, they are a force to be reckoned with.
We invited some of them to a readers’ lunch with top fund manager Anthony Bolton at the end of last year, and they grilled him to within an inch of his life. I have become good friends with one of our female subscribers, who happens to be a small-time property investor. Having spent tens of thousands renovating a property, the builder tried to pull a fast one. She complained, and was rudely asked if she had consulted her husband about the problem. Enraged, a swift financial castration was subsequently performed in court.
Never underestimate the power of a woman. Especially if she reads the Investors Chronicle.