MARKET COMMENT
Are Women Better Investors?

By David Kuo (TMFDragon)
November 12, 2001

Carburton Street, London -- According to a survey conducted by Digital Look, which covered the 12 months to October this year, women fared better than men when it came to their investments. It was reported that in a study of 80,000 portfolios, female investors over that period generally made a profit unlike their male counterparts whose portfolios were in the red.

It was also found that women took fewer risks with their investments while men were more prepared to invest in so-called 'growth' stocks. Many of the women surveyed were also said to prefer investing for the long-term and tended to have a more balanced portfolio of shares. The survey said that women investors would favour 'safer' shares that included banks and retailers while the men had a significant part of their portfolio in technology companies.

Surveys like these make for interesting headlines and they might even prompt certain readers to draw immediate, though perhaps wrong, generalisations about how the opposite sex handles their investments. Some of those assumptions might include that testosterone-charged males trade regularly in the hope of making a quick profit. Or perhaps that passive women investors stick with companies through thick and thin. However, had the survey been conducted two years earlier, when the techMARK 100 was at its all time high, the results might have been vastly different. During that time, technology issues enjoyed strong support from the market and those investors prepared to invest in high tech companies were rewarded by substantial profits, albeit only on paper in some cases.

However, some other studies, that looked at longer time periods, have also suggested that women investors do better, although by a much smaller margin that this survey suggests. The downturn in the technology sector has been unkind to those with a strong bias towards this area - i.e. the chaps. We should avoid the temptation of finger pointing and finger wagging and appreciate that investing is a long-term exercise. You should only invest in companies that you feel comfortable with -- even if they happen to be in the higher-risk technology sector.

The author is a man.