Should Women Rule the Investment World?

 Consider: 

• In 2020, women controlled the majority of  the US nation's wealth. In fact, they control 51% of it

• By 2030, 54.9% of all Boomers will be women 

• We currently make up two-thirds of the workforce

• Women spent 81 cents of every dollar

• 80% of women will be responsible for all financial decisions in households

• 73% of all full-time working women see themselves as their family's Chief Financial Officer, moving up from seeing themselves as their family's "Chief Purchasing Officer."

Yet: 

• 90% of women feel financially insecure

• 50% fear losing it all and becoming a bag lady (and that includes 48% of all women earning at least $100,000 per year)

 • Only 1 in 5 women read the financial section of a newspaper (while 3 in 5 men do)

 • 42% of women do not know what a mutual fund is

Women have gained all of this financial and fiduciary responsibility but are not getting the information that they need in order to make sound financial decisions! Are they going to go to the big Wall Street firms to get it? (I don't think so. Wall Street has lost so much of their credibility and are only now digging out.) 

Wall Street needs to be given a good shaking and turned upside down on its head. Its language needs to be creatively communicated so that every woman gets it. Most women don't read much of the material on finance because it is as dull and dry as sawdust

Finance therefore appears to most women as overwhelming, complicated, confusing and...BORING. No wonder we're in trouble. 

 • The first question you must answer is this: "Do you know what you own and why you own it?"

I have never met one who could answer both parts. We're not talking about Monopoly money here. This is real money. Serious money. You better be able to answer this very simple question about your own money and investments or someone is sleeping at the switch

 • The female brain on money is different than the male brain on money. Ask any women who has more than one gender in her off-spring. 

As Women:

 o Desire to embrace our femininity, which will yield gender-specific, different decisions about how to spend money.

o Desire to nurture our children and families, which will yield different measures of risk management.

o Are more risk-averse. When the combined housing crisis and financial meltdown of 2008 effectively wiped out half of investor's wealth, men tended to look at the world with anger, and perceived the world as being less risky. Women tended to look at the world with fear, and perceived the world as more uncertain. 

o Are less likely to go for "The Big One" 

o Trade less frequently than men. Men trade on average 45% more than women do. Single men trade more frequently than married men, who trade more frequently than single women, who trade more frequently than married women. 

o Double returns when running hedge funds. The problem is, only 6% of all hedge funds are run by women.

o Portfolio Managers average 1.4% greater returns than those run by men. 

o The work on Personality Theory, upheld by the varied disciplines of philosophy, psychology, behavioral finance, psychoanalysis, psychometrics and neuroendocrinology, shows that different personality types "see" money differently. I am using this research in my upcoming book, to turn women onto finance. It is my goal to see women fascinated by money, to choose to study it, to ignite their imaginations and to fuel their inspirations

 o Hippocrates noted personality differences as early as 400 B.C. 

o Galen named the Four Personalities. 

o Carl Jung developed Type-Trait Personality. 

o John Holland studied the "science of personality." 

o Freud, Kant, Erickson and Myers-Briggs all developed their own version of examining personality type. 

o Recent writers who ascribe to the notion that there is a "Money Personality" have got it backwards. There is not a Money Personality. We each have a personality, from which we derive the way we "see" and handle money. The way we earn it, spend it, save it, invest it, and give it away depends on our personality (not the other way around!) 

o The field of Neuroeconomics shows that "Animal Spirits" calls into question, or stresses, the Efficient Market Theory. It turns out: people do not use logic and reason to make investment decisions; they behave irrationally.

o Investors are more willing to take more risk in order to avoid losses that they are to realize gains. Investors, it turns out, essentially become risk-takers to avoid loss!

o Investors deal with fear of regret in dealing with their own money. 

o Investors tend to have over-confidence in their abilities to invest. They tend to confuse luck with skill. 

Should women rule the investment world? In many parts of the developing world, they certainly are, almost all of microfinance is dedicated to women's ventures. If money rules the world, and the hand that rocks the cradle runs the world, I would say it is fairly safe to presume that women are certainly getting there. But we need to get a grip on it. 

As a woman, you need to know who you are, where you are, where you want to be, and how money can help you get there. And in order to do all of that, you really have got to "get" money.  

Article Source: https://EzineArticles.com/expert/Carolina_Fernandez/6033