Financial Daily from THE HINDU group of publications
Sunday, May 22, 2005
Industry & Economy - Gender
How women fare as investors
Mumbai , May 21
`WHAT do women want?' is a question as old as the universe, if popular culture is to be believed. Whether civilisation is getting any closer to answering that in a generic sense or not, answers to the question `what do women want financially?' are becoming increasingly evident.
Here are some interesting results thrown by a gender study conducted by Merrill Lynch Investment Managers. As investors, women are less knowledgeable about financial markets and products than men. But they are more interested in finding out about these than men are. Women make fewer mistakes while investing and also don't repeat them as often as men do.
Women are far less likely than men to hold a losing investment too long (35 per cent of women reported having done so at least once against 47 per cent of men) or wait too long to sell a winning investment (28 per cent versus 43 per cent). Men are also more likely than women to allocate too much to one investment, buy a hot investment without doing any research and trade securities too often, according to the research.
Even though Indian financial services companies have not taken gender into cognisance so far while developing products and services, it is only a question of time, as Indian women are beginning to rake in some serious money now.
In Japan, mutual fund products specifically targeted at women have been well-received, and earlier this week, a women-only financial advisory service opened its doors in London.
A Mumbai-based financial planner , Mr Gaurav Mashruwala, says that behaviourally, women tend to play it safe with their investments. They tend to steer clear of products with high volatility and are more comfortable investing in debt-based products. "While the financial goals are different for each woman, depending on various factors like age, marital status etc, it is the value of money that has been instilled in them that makes a difference rather than gender. However, there are certain considerations that are more important for women than men. For instance, location plays a key part in deciding a single woman's property purchase," he says.
While a greater percentage of men are more knowledgeable about investing and enjoy spending time working out their investments, more women are likely to ask for help and hire a financial advisor, reports the Merrill Lynch survey.
"We have found that women want to work with an advisor to build a long-term financial plan. A woman's planning-oriented approach and propensity to seek professional advice contribute to her long-term investment success and provide her with a greater sense of overall financial satisfaction," Ms Caroline Gundeck, Director of Women's Business Development at Merrill Lynch, was quoted in the study.
While more women (than men) still fall under the category of `reluctant investors,' gradually, the compact is being replaced by a calculator.
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