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Let me preface my comments directly so we start with a clean slate. Everything
else being equal, I would much prefer dealing as an adviser/planner with
an intelligent woman than an intelligent man. The male ego and the associated
arrogance is literally impossible to deal with. I swear almost all
men think they know everything about investments just because they read a
magazine once and they know where a book is. It's not only annoying
and extremely time consuming to get them to recognize facts, but one also
has the additional liability since they tend to get upset faster and complain
more. I must admit that, as a male adviser I had a tendency, in the past,
to simply accept the "male bravado" as fact reflecting competence. Not any
more. I learned quickly and no longer take anything at face value. (And no,
I have never been sued over an investment and about half of my current clients
are men. But they are "smarter than the average bear".)
An intelligent woman listens better, tends to ask better questions and stays
actively involved in the process. As for dealing with a stupid woman- no
different than dealing with a stupid man.
I don't.
To the point. First, many women think they are not good investors and therefore
will make too many mistakes and lose the little money they may have. Usually
wrong since studies have shown that women are actually better investors than
men- at least in groups. (The National Association of Investors Corporation,
the trade group for investment clubs, noted in 1992 that all female clubs
had outperformed all male clubs in each of the last five years. A 1995 NAIC
study found that women only clubs outproduced men only investment clubs in
9 of the past 15 years. A 10/96 comment by the NAIC says that the women had
earned a 21.3% average annual return versus only 15% for the men only groups
(no time frame identified.) It's just that men present themselves as the
more astute investors and, without other evidence, most people will not disagree
with their statements. By the same token, I DO have the supporting documentation
and can clearly indicate that men, for the most part don't have a clue to
the fundamentals of investing. So why is it that they look better on paper?
Because men are more aggressive in their approach to investing. Since stocks
are more aggressive investments than bonds- "cause that's where the action
is"- that is where they usually invest. And statistically, stocks have
outproduced just about anything else over the last 50+ years. (The average
returns are about 11+%, but I'd suggest something more conservative for the
long haul- not exceeding 10%. 1985 to mid 1999 was/is a statistical aberration
(I think) that will not necessarily be repeated in the future.) (I made that
statement before the 2000- 20002 debacle) Anyway, so far, so good for men.
But a problem arises in that, as they keep investing out of ignorance and
potentially succeeding, they tend to think it is due to their inherent
competency instead of the market. All of a sudden, when they are too old
to lose money, their non diversified portfolio bites the dust and the entire
family loses. Then there is despair and depression- but that is another story
addressed elsewhere. Women are, for the most part, unwilling to take such
risk of loss and therefore may avoid the market in total.
However, as stated, studies have shown that women are better investors once
they decide to do something as detailed by several investment clubs.
(Unfortunately, they are still hamstrung individually by the industry, but
I'll get to that.) The reason they do better when compared to groups of men
is that they tend to do more research than men and DON'T act as aggressively
in just buying at the first hot tip (Men tend to buy and sell randomly with
a view to short term "triumphs." Doesn't work.) Women look at rating
services and other company factors, etc. before making a selection. Everything
else being equal, knowledge normally wins out. Secondly, women are better
shoppers (that's not a slight- I'm one of the best shoppers around) and therefore
will wait for a bargain. Instead of buying at the market, women have tended
to put in orders below current price hoping to get a lower price. Again,
acting slightly less aggressively- or more intelligently- pays off.
Unfortunately, the marketplace does not look particularly favorably upon
women investors as individuals. (I'm talking now about a one on one relationship
with a broker.) Studies have shown that male brokers tend to dismiss women
as being too emotional, unwilling to act, not having enough money, etc. and
spend little time with them nor provide the same information as they would
provide to a man. (The situation is slowly getting better however, primarily
as women make more money and put more money into the market and/or where
they simply control more businesses.) Nonetheless, women are not going to
change that lack of consideration and professionalism- and for all intents
and purposes, shouldn't bother. Why? Because these types of brokers are twits
to begin with and trying to make a silk purse out of a sow's ear seems a
waste of time. Simply go to the HP12C sheet and
the Who Do You Trust page and seek out those who
know something. Those with knowledge and competency will tend to be more
in tuned with providing the info and insight EVERY investor should receive
regardless of sex.
Unfortunately, this very reason of lack of communication and knowledge is
the reason that women get shortchanged again by the brokerage industry -
and this time by other women. Many firms have used their women brokers in
offering special women seminars on investing as though the insight
a woman broker has will make all the difference. Bat Guano. That's mostly
a smoke screen in an attempt to make commissions or charge more fees. Putting
a skirt on a twit makes the twit no different. Remember, all brokers are
taught essentially all the same licensing training material across the U.S.
As stated ad nauseam in other pages herein, I was never required (nor was
effectively allowed) to provide anything of substance in any of the securities
licensing classes in over 15 years. Spending a required 20 minutes over a
two and a half day period describing mutual funds for the basic series 6
license is clearly inadequate in addressing almost any investment concerns
anyone has.
THE FUNDAMENTALS OF INVESTING (alpha, beta, diversification, correlation,
standard deviation, etc.) HAVE NEVER BEEN TAUGHT AS PART OF LICENSING TRAINING
TO SECURITIES OR INSURANCE REPS.
If your broker, as a man, woman, small furry animal or whatever
has a demonstrated background and a demonstrated additional
competency, then they might be O.K. But don't be lulled by the marketing
ploys of the firms.
LOTS OF OTHER CONCERNS. Another problem area- though slowly
getting better over time- is the fact that women make less money and do not
have the same discretionary income to invest as a man. Couple that with a
longer lifetime than men- by about six years at present- and they need more
money overall. (Actually, a girl born in 1996 that escapes the diseases of
breast cancer and heart disease can expect a lifetime of about 92.) But it
gets worse. Due to a woman's child bearing and rearing duties and the fact
that they act as caregivers of all people, they do not spend as much time
in the workforce and therefore do not accumulate the pensions that many men
may have. Add in a high divorce rate and the fact that once divorced, women
are spending their remaining years single and are having to depend upon
themselves. Statistics note that 50% of first marriages end in divorce and
that in the first year after a divorce a woman's standard of living declines
by 73%. Additionally, the average age of widowhood for American women is
56. So what is the point in this seemingly negativism? To force women (and
everyone for that matter) to the one facet of planning that can make a
difference.
A
BUDGET.
You would be amazed, when forced to recognize where every dollar goes, how
it is possible to allocate funds in a much better and more economical fashion.
How much can a relatively small amount of money grow to over time? Putting
away $1.00 a day at age 35 till age 65 at 8% after tax amounts to roughly
$46,000. At 10% it's $69,600. I submit that in almost all cases, one can
find $1 dollar a day to put aside. Maybe $2, Maybe $3. Look at a pack or
so of cigarettes per day. At $2.00 and 8%, that $91,000 at age 65. If your
returns was 10%, that's $139,000 and clearly indicates why the more aggressive
investments are worth considering (+$48,000). $3.00/day at 8% for 30 years
gives $137,000 and at 10% gives $208,000. Best incentive to stop smoking
I have ever seen.
In summary, women are faced with more obstacles then men but the issues are
not insurmountable. The first thing to do is recognize that you generally
possess all the skills of a man- maybe more- but have not necessarily put
them all to use. Nor has the marketplace let you do it effectively. The aversion
to risk of loss can be tempered by increasing knowledge and finding a VERY
good adviser. You should get good communication at that level- if not move
quickly. And, most importantly, remember the money that you need for your
retirement may be available if you simply do a detailed budget and invest
accordingly.
Click to Buy it now!
Sample
Pages
HEALTH-MIND-BODY LINK:
Primarily designed for women since it addresses menstrual cycles, rape trauma,
pregnancy, PMS, etc. it is also filled with lots of other interesting material
with online personality and health tests (assertiveness, I.Q., lifestyle,
etc.) with lots of other links. Very enlightening. Men should take
a look as well.
NATIONAL ORGANIZATION FOR WOMEN LINK:
Information of every type for women. Heck of a site.
WOMEN BUSINESS LINK: A site designed
in conjunction with the Small Business Administration and gives businesswomen
an extensive amount of information on running a business: management; finance;
marketing, etc. Highly recommended.
WOMEN'S HEALTH LINK:
"The mission of the Office of Women's Health (OWH) of the Food
and Drug Administration (FDA) is to serve as a champion for women's health
both within and outside the agency." As with most government sites, they
tend to contain a wealth of information that is updated constantly. Check
it out.
WOMEN and SOCIAL SECURITY LINK: Tons
of good info
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