Men more likely than women to take risks with money Industry seeks to tap assets of female investors

March 24, 1996|By CHICAGO TRIBUNE

When a man loses money in the stock market, says Olivia Mellan, he tends to shrug it off to bad luck or bad advice and figures he'll make it back.

When a woman loses, says Ms. Mellan, a Washington, D.C., psychotherapist and financial author, she blames herself and is apt to have nightmares about losing everything.

"I don't know whether it's some chemistry in the brain, or whether it's all socialization," Ms. Mellan said. "But I do know that when it comes to money matters and investing, men just expect that they'll be competent.

"And women don't."

Such a sweeping sentiment is guaranteed to raise the hackles of tens of thousands of successful female investors. And it seems to belie the fact that, in recent years anyway, investment clubs made up of women have consistently outperformed those of men.

Yet there's little doubt among many in the industry that female investors are often too cautious for their own good.

"Very simplistically, men regard investing more as a game, so they take more risks," said Ronna Lichtenberg, senior vice president of Prudential Securities in New York.

"Women think about investments through life goals, such as their children going to college. The mistake many women make is being too cautious. They lock themselves in to something that won't make the money they need to keep up with inflation."

Whatever the reason, there do seem to be basic differences between the way men and women invest, according to surveys by Prudential Securities and Oppenheimer Management Corp.

A third group, the National Center for Women and Retirement Research, is preparing a "Gender Investment Comparison Study," scheduled for completion this summer. Dorothy Clarke, director of the nonprofit center, says previous studies have shown women to be generally conservative in money matters.

"Now," she said, "we want an accurate comparison of the priorities of men and women so we can offer the needed education for women" through nationwide seminars.

A major impetus behind studies by investment houses, of course, is their desire to tap into the female market.

Almost 60 percent of all women over 16 are working today; they account for more than 46 percent of the work force. They live seven years longer than men. About half of all marriages end in divorce.

Combine those factors, and the result is a huge market of women who have their own money and are likely to be on their own, at least for part of their lives.

According to Oppenheimer, single women save 1.5 percent of their annual income and invest less than 14.6 percent of their (non-real estate) assets in equities, compared with 3.1 percent and 27.4 percent for single men.

"Women comprise a huge, untapped market," says Loretta McCarthy, chief marketing officer for Oppenheimer in New York.

And, she adds: "Women have not been socialized to have the confidence that men have when they go about the business of investing. Many women, even when they have the money to invest, don't know what to do."

According to the Prudential survey, 41 percent of women said they delayed making financial decisions because they fear making a mistake, while only 29 percent of men said the same thing.

Fluctuations in the stock market made 54 percent of women respondents nervous, compared with 40 percent of the men.

And 39 percent of the women said they were actively involved with their investments, compared with 59 percent of the men.

Pub Date: 3/24/96

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