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When it comes time to make big financial decisions,
research consistently shows that women more
frequently hold the purse strings than men.
While this is a positive finding as women tend to make smart,
thoughtful, informed financial decisions, it also has the potential
to drop an anchor in your investment portfolio’s growth.
If you’ve ever braved a session of retail shopping with a
woman, you’ll know as well as I do that men shop differently
Men typically tend to approach a shopping task, no matter how
big or small, in much the same manner: quickly, quietly and as
painlessly as possible.
On the other hand, women often celebrate the experience.
Shopping for a new fridge, for instance, becomes more than a
simple trip to Harvey Norman. It can become an epic research
mission, both online and in-store, complete with spreadsheets
and continuous calculations to ensure the best possible deal
In other words, women are generally more thorough, more
measured and more detail-oriented than their male counterparts.
This is one of the key differences between men and women
as investors, and when it comes to making astute property
investing decisions, it often gives females the upper hand.
Now this isn’t just what some may say is my “biased” view;
there are researchers far smarter than I who have come to the
same conclusion, including behavioural finance researcher Nelli
Oster, a director and investment strategist at BlackRock.com.
She points to three key reasons why women tend to make
smarter financial decisions than men:
> 1. Women think long-term
“Women tend to focus more on longer-term, non-monetary
goals,” Oster says. This is because women generally associate
money with security, independence and the quality of their and
their families’ lives.
It’s no wonder that a 2010 Boston Consulting Group Study
found that female investors tend to focus on longer-horizon
planning. “Men, on the other hand, who tend to be more
competitive and thrill-seeking by nature, often focus on the
short-term track records of their portfolios,” Oster adds.
> 2. Women take their time
In a general sense, women tend to be thorough when making
decisions, investing more time into the process than men.
“Women also tend to be more patient as investors and consult
their advisers before adjusting their portfolio positioning,
whereas men are more prone to market timing impulses,”
> 3. Women seek help more
The old cliché about men failing to stop and ask for directions
rings a little true here too. “To gather information, women often
prefer group discussions to men’s more independent learning
approach,” Oster says. Women are more receptive to financial
research and advice, which means the financial decisions they
do make are often guided by expertise, rather than gut instinct.
¿ SHOULD WOMEN HOLD ALL THE FINANCIAL CARDS?
Now, in saying all of this, it may seem like I’m advocating
a strategy whereby women should be making all the
But my view is that when it comes time to engage in the
property buying process – whether it’s making an offer,
negotiating on price or settling on terms of the deal – the only
way you can build your confidence is to actually get out there
and do it.
This is where, in my opinion, some female investors may
falter by potentially second-guessing and seeking to reassure
themselves ‘one more time’ that the deal truly stacks up, they
may sometimes end up standing in their own way.
As a result, some women may risk missing out on great
investment opportunities, because they might take too long to
weigh up all the pros and cons.
¿ SO WHAT’S THE BEST APPROACH?
As I see it, the best investment decisions are made by investors
who are decisive, thorough and clear on what they want
Yes, it’s true that men can be impatient shoppers. They’re
also more prone to attempt timing the market, a strategy that
frequently ends in tears.
But, at the end of the day, they’re also generally action-
oriented, decisive and often more willing to take a risk.
That’s why I believe a mix of both the male and female
approaches are integral if you want to achieve long-term
financial success as a property investor.
The feminine approach may allow you to build your wealth
in a safe, steady and secure way: it ensures you cross all your
t’s, dot all your i’s and research every inch of the deal before
The masculine approach is based more on instinct, and allows
you to proactively direct your passion and energy into moving
forward towards your property goals.
Equal measures of both male and female investing attitudes
will give you the best chance of building a profitable property
portfolio that delivers for years to come. API
Who should control
the purse strings?
Director of Metropole Property Investment Strategists,
www.metropole.com.au . His books are available from
INVESTOR PSYCHOLOGY // MICHAEL YARDNEY
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