So maybe men aren’t really from Mars or women really from Venus…or vice versa for that matter. In fact, more evidence has turned up that both men and women originated on the same planet, at least when it comes to investing. According to a report from the Merrill Lynch Wealth Management Institute, the investing habits of men and women are a lot more alike than most people assume.
The Merrill Lynch report is based on an internal study that collected responses from 11,000 people, around 6,000 men and 5,000 women.
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Women and investing habits
The results of Merrill’s survey showed that men and women are actually very much alike in terms of their perceptions about money and investing, particularly in terms of both genders being equally subject to strong emotional influences when making investment decisions.
That said, one clear difference is that women tend to be more risk averse than men in making investment decisions. However, as Michael Liersch, head of Behavioral Finance at Merrill Lynch, points out, confidence becoming overconfidence is as much a “problem” in investing as when caution becomes timidity.
Investing habits: Differences based on background, not gender
Liersh points out that while it is easy to point out “differences” in the investing perspectives of men and women, most of these differences are relatively strongly correlated with social and demographic factors such as education, employment status and financial circumstances rather than attributable to personality or innate characteristics.
Investing habits: Level of financial knowledge
Women typically reported less financial knowledge or investment experience than men. More than 28% of all respondents described their investment experience as relatively high, 40% replied moderate and 32% felt their personal experience was relatively low. Overall, women were much more likely than men to report lower levels of financial knowledge.
Making your own financial decisions…with advice
The Merrill report also highlighted the fact that both men and women want to make their own investment decisions, but welcomed the help of an experienced financial advisor. “Roughly half of women and 55% of men say that they personally wanted to take part in making changes to their investment approach—not a substantial difference. And nearly 100% of participants, regardless of gender, said they desired the support of an experienced advisor or money manager to help in making productive investment decisions.”