We all have similar reasons for investing. The most common goal among all investors is preserving and growing assets for retirement. The most important factors used when constructing investment portfolios include an investors risk appetite, financial goals and investment horizon. These factors drive the security selection and asset allocation decisions in the portfolio construction process.
A common myth among investors is that women are more conservative with their investment choices and possibly less successful with investment decisions than their male counterparts. In fact, a study by Fidelity Investments of over 8 million clients recorded that only 9% of women thought they would outperform men with investment related decisions. This same study not only found out that women are just as successful as men with investment related decisions, but women have performed better than men by nearly a half a percent – which may appear minor but has a significant impact over time1.
Another study by Capital Group concluded that men and women share the same investment preferences with one exception: women are far more likely to look for positive social economic impact when making an investment decision2. The appetites for performance and risk are similar and not gender specific.
Contrary to stereotypical views that women are inherently more conservative in investment decisions, it may be prudent for women to have a slightly more aggressive bent in her investment portfolio to attain her investment and retirement needs. Studies show that women tend to have longer life expectancies than men3, which would require greater savings in retirement. This would augur for the fact that women may better prepare for the future by working with their advisor to ensure their investment strategy will be sufficient throughout retirement.
At Fragasso Financial Advisors, we do not approach investing with gender bias. We treat each investor as an individual with specific circumstances and needs. Each investor is guided by our client experience to gauge their risk appetite, goals and needs, and an investment policy statement is generated to match their individual profile. In the case where investors share a household, an investment policy statement is created to juxtapose the different views, needs and goals of each party. It’s our responsibility to consider each client’s circumstances with a fresh approach couched in time-tested financial planning principles.