Women make better investors, if only more of them had a go

By Claer Barrett
March 5, 2010

Claer Barrett- 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.

Comments

I think it’s a generation thing too. My husband’s mother has always said with money: “once it’s gone, it’s gone” and he’s lived along those lines all his life and never been in debt.

I actually think that there should be more emphasis within the female magazines on investment etc. For example, a leading Sunday newspapers’ female magazine is so lifestyle/fashion driven and its Business section always has a model/scantily clad woman on its front page for its male audience. Granted, the readership is as such, but how do we stop the stereotyping and start realising that women are just as interested in business and shouldn’t be patronised. The answer: make business news more appealing to both sexes, and the female magazines more open to having a balanced mix of fashion/lifestyle and business led features.

Posted by Lola | Report as abusive
 

Women should not wait for death before they start taking an interest in and responsibility for their own finances and investments.

I used bank half my wages in the building society next door when I started work and when I wanted a mortgage, aged 21, had only one meeting with the branch manager to get the money. Friends and colleagues were astonished by my audacity at the stage. My parents had never owned their own home, so looking back I sometimes wonder at my nerve.

Decades later I wonder how attitudes have not changed. I, too, had a series of conversations with a builder about a bill. He did not take me seriously and only wanted to talk to my husband. That was his mistake. It cost him dearly.

Women need to have confidence that they can deal with institutions and male-dominated industries. Reading the money and financial pages in national newspapers, online and in specialist magazines is a good start.

Posted by Lindsay Cook | Report as abusive
 

I think Miss Barrett’s article demonstrates only that female investors are likely to be far more cautious when it comes to investing than their male counterparts. ‘Cautious’ and ‘better’ should not be confused and personally I think the expression Fortune favours the brave is apt.

Posted by Nick | Report as abusive
 

Claer Barrett. I wish we can republish the articles of the Investor Chronicle at thenextwomen.com, we have a readership of business women leading, investing and founding businesses.
It would be a start to get more knowledge about investing into the female business community.

 
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