In the majority of households throughout the country, there is a woman who pays the bills, budgets the money, and makes major consumer decisions. Yet, from showrooms to boardrooms, females are often treated as the weaker sex.
In a recent study conducted in Canada, 82% of women are either primary decision makers, or have equal responsibility for household financial decisions. And they want to do it right!
Still, when it comes to money, men and women speak a different language and have different investment styles.
To understand the difference, you don't need to look any further than the way the two sexes handle being lost while driving - men try to figure out which way to go even if it means remaining lost for a longer period of time; women stop and ask for directions.
The majority of women will have complete responsibility for all their financial decisions at some point in their life.
Whether it's when they are living away from home at college, starting their career as a single professional, a divorcee, or a widow, it is widely estimated that as many as 90% of all females will find themselves completely and solely in charge.
However, women tend to be less confident and less engaged in the investment process.
Unlike men, women don't discuss the success of a particular stock or fund at a cocktail party. For them, there is no ego in investing. But there is a strong need to have security for both themselves and their family.
Though women may be less likely to enjoy the "sport" of investing, this may be exactly why they may be better at it over the long run.
That's because they are comfortable admitting what they do not know, and they are willing to ask for help.
Join an Investment Club
Female investment clubs are popping up all over the country. These clubs are a safe and supportive environment to learn the ropes of investing.
The key difference between a male investment club and female club is the educational component. Female clubs often have homework assigned and spend time thoroughly researching possible stock picks, creating presentations and democratically voting on stocks to be included in their portfolios.
Additionally, the stock picks seem to have more of an emotional component, like whether they feel it is a good company or whether they use the product themselves. Women are also willing to give their picks a lot more time to perform, and tend not to sell at the first tick up or the first tick down.
Most members enjoy the social aspect of the club as well, and love learning the ins and outs of investing through a supportive and nurturing structure.
Value Professional Opinions
Women know what they don't know, and they have no problem asking for help.
Because of this, some will look to the expertise and guidance of a professional to help navigate the murky waters of financial planning.
The key, however, is good communication and trust with their chosen advisor. Women prefer an advisor that they can have a conversation with, and who will actively listen to their concerns.
When looking for an advisor, women don't need to go beyond the initial meeting. If they feel overwhelmed by jargon, or feel that their concerns are not being adequately addressed, it is best to interview another advisor.
Other Things Women Do Right
Neither men nor women can claim a foot up in investing just by virtue of gender.
Where men tend to love the "fantasy football" aspect, women gain satisfaction from the feeling that they are taking care of themselves and loved ones.
There are some very positive aspects of the female sensibility when it comes to investing.
For example, men tend to trade a lot more than women. However, not trading as often has proven to be an advantage to earning more over time. In addition to incurring less in charges and fees, holding investments longer seems to benefit a portfolio when the market rallies.
During the 2008-2009 financial crises, men were more likely than women to sell, leading to increased losses and fewer gains when stock values began to return. In this case, patience was a virtue, and portfolios reflected this.
Men are more comfortable with risk as a general rule, and with this comes both pros and cons. High risk provides the potential for the greatest returns - but also the greatest losses.
Women don't tend to swing for the fences. They are more content with a slow and steady approach. This strategy won't result in getting rich quick, but you won't get poor quick either.
For women, the challenge is learning that risk isn't always bad, especially when included in a well balanced portfolio.
Taking Financial Control
Women face special financial challenges and need to take control of their financial futures from the very beginning of their working lives.
They live longer, often earn less and are more likely to take breaks from the workplace to care for children or elderly parents.
Because of this, they need to take special care in planning for their financial future. Through education and/or partnering with a trusted financial professional women can create financial autonomy.
As women continue to break the glass ceiling in the business world, they should have the financial portfolios to prove it.
Cindy Diccianni is a certified long term consultant, a registered investment advisor and a registered representative with Leigh Baldwin & Company member FINRA and SIPC. She is the founder, owner and principal of Diccianni Financial Group Inc., East Norriton, PA. You can contact her at www.DFGpa.com. Jeanne Lawson is administrative assistant at Diccianni Financial Group Inc.