Do women behave differently from men when it comes to saving and investing? A common stereotype is that women are more patient and risk-averse than men when it comes to deciding where to invest their savings. There are also those who say that, if instead of Lehman Brothers, there had been the "Lehman Sisters", probably these last few years would have been quite different, because more women in finance leadership positions would lead to a kinder, more orderly economy.
There is no shortage of well done work on this “men vs women” trend in the financial world. In an interesting and in-depth research on women and investing, The Boston Consulting Group highlights how women tend to seek a more accurate understanding of their risk profile, setting clear financial goals, looking longer term and investing conservatively. In another work, two finance professors, Barber and Odean found that returns on investments made by women are on average better than those of men. Furthermore, women move their portfolio less, which is less volatile, and have fewer expectations in terms of performance: in short, according to the study in question, women avoid taking too many risks by pursuing improbable results (perhaps pursued under the stimulus of testosterone).
Not bad ladies, it would seem. We at Advise Only would like to contribute to this interesting line of study to understand if it is true that the financial behaviors of women and men are actually different. We can do it, because in our now large pool of users, there are (fortunately) exponents of the fairer sex. Therefore, using in a totally anonymous form and in compliance with privacy laws, the data as of September 26th of our users registered on AdviseonlyWe did a little investigation…
First of all, it must be said that women, while constituting a non-negligible portion of our users/customers, are still a numerically inferior component (I stress: inferiority is numerical... I invite girls and ladies to reverse this trend). Both men and women tend to create an average of 2-3 portfolios each.
Let us now try to address a first relevant question: Are ladies really more likely to know their risk profile? To answer this question, we checked whether the percentage of women who took the Financial DNA Test (a free test, offered by our site, which provides the investor's risk profile according to the MIFID regulation), differs from that of men. It turns out that 66,7% of women and 67% of men took the test. High number for both, congratulations, but that does not differ from a statistical point of view. In short: among our users today, women and men are equally likely to know their investor profile.
Another question: Do women's portfolios differ from men's in terms of composition and risk? So let's take a look at wallets. Those of women have an Advise Only Composite Risk Index (index available to our users who decide to create a portfolio on Adviseonly) average equal to 18,6 while men equal to 21,9. The difference (3,3, corresponding to 18%) is beginning to be seen here: in this phase of the market the attitude of women is oriented towards greater prudence.
Let's go even further and analyze the composition of the average portfolio of women, which we have called AO Women, comparing it with the average portfolio of men AO Men. There are differences in terms of weight, as the following two graphs show, one more "granular" in terms of asset class, the other with a highly aggregated view of the various types of investment (shares, bonds, monetary and liquidity , commodities).
In terms of allocation, the differences appear glaring: in this period it seems that the fairer sex is more oriented towards the more prudent bond and monetary investments, diversifying with commodities (among which is included thegold). The difference in share weight is particularly marked in relation to Italian shares: it will be that women are more rational and are less influenced by "home bias", i.e. the tendency to favor investments in one's own country even when there are none is it apparent reason? The differences in asset allocation, it must be said, are also significant at a statistical level (for the "geeks": don't worry, I've posted a document on the Community Advise Only on the tests carried out).
So, summing up, it seems that within our pool of users and customers there is a certain difference in investment style between ladies and gentlemen. I almost forgot: the medium-sized AO Women and AO Men portfolios are available in the Advise Only Community (by the way, have you applied to access the first social network for investors and savers?), and in the Market Analysis/Investment Ideas section.
