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Women investors; astute and growing in confidence

Women are often reluctant investors. A survey of investors conducted earlier this year by the US based Fidelity Investments showed that 91.0% women consider themselves to be below average investors and expect to do poorly compared with men. This survey and many others like it, show that regardless of education levels women have doubts about their investment abilities. However, Fidelity’s analysis of eight million client accounts showed women actually tend to do better than men in generating investment returns and they save more of their income.

The unfortunate reality and one that I have consistently seen in my practice is that most women feel that advisors talk down to them or ignore them completely. Of the women surveyed by Fidelity, 60.0% said that they have not consulted a financial advisor and most said that they are wary of doing so.

In a similar themed survey conducted earlier this year by Canadian bank, CIBC, showed an encouraging picture for Canada, where nearly half of women surveyed said that they feel confident about investing. The survey finds more women beginning to take an interest in their financial future. Interestingly age does separate the levels of confidence that women in general feel towards their investments with 46.0% of women aged 18-34 more likely to take charge of their own investments as compared to 29.0% of women aged 35-54 and 19.0%of women aged 55 and over.

Through innumerable kitchen table conversation with my clients, I see in most cases women asking the most sensible and thoughtful questions and are incredibly perceptive. They bring an innate level of common sense and practicality to the decision making process. Most men I encounter push for very aggressive investment strategies irrespective of their goals while women consistently advocate for conservatism with a slow and steady value based approach. The CIBC survey showed that 72.0% of women said safety of their capital is most important. The flip side to that conservatism is that many women investors prefer the safety of Guaranteed Investment Certificates (GICs). More than half of Canadian women surveyed said they intend investing in GICs, which produce a very low rate of return and are not suitable as part of a long term portfolio geared toward retirement. When provided with an investment option that balances their need to grow their assets while maintaining safety of capital, I find my female clients eager to understand and quick to adopt such an approach. Given their demonstrated abilities, women investors should not be reluctant to engage advisors and ask questions of them and more importantly participate actively in the management of their money

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