Writer: Steve Dinnen
It is true that women don’t invest as much as men. It is not true that they have poorer results. Financial services giant Fidelity, in a survey done in 2017, determined that women outperformed men by 40 basis points, a small but notable advantage given their perceived lack of interest in investing. In 2015, a down year for the Dow Jones Industrial Average, men lost 3.8% of their portfolio value, while women gave up 2.5%.
So women can invest, and wisely. But they tend not to, for a variety of reasons. Fear of losing money, or control. Fear of failure. Or marriage — once a woman marries she tends to let the husband handle investing. But trouble lurks due to the “3 D’s”: divorce, death and disability. Any of those events promotes a woman from passenger to driver and not necessarily on her timetable.
Bailey Davis often encounters women as investors when one of these 3-D events spawns a meeting with her as an investment officer with BTC Financial Services, part of the Bankers Trust Co. One such meeting was with a woman who was joint owner of a successful business with her husband. Then they divorced.
“She had no idea about their net worth. She felt very lost and didn’t know how to proceed,” Davis said of the situation that the woman found herself in. So some education was in order, to acquaint the woman with the need to invest – how else are you going to earn money and stay ahead of the robbery known as inflation? – and various methods of getting there, including stocks, bonds, mutual funds, ETFs.
Davis also works to dispel fears that can surround investing. “They’re terrified of the market,” she said of the uncertainty that it brings. “They don’t understand that corrections are normal.”
She noted that one client was in touch with a financial manager who had worked for decades with her recently deceased husband and perhaps took it for granted that he would handle her affairs going forward, and without explanation. But she had questions about what was going to happen, and how, and so Davis prepped the woman with a list of questions to put to the adviser.
“He flat-out avoided her questions,” she said. That’s a sure sign for anyone, woman or man, to find someone who will provide answers.
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