Breaking the bias on women investors

In celebration of Women’s Month this March, it is timely that we talk about female investors and their investment behaviors.

Keepers of the purse

While the investment industry may be deemed male-dominated, in most households, including Filipino households, the female member is typically in charge of managing household finances. Thus, phrases such as, “keeper of the purse” or “finance manager” are often used to describe this role – one among the many different roles women play.

A Forbes article written by Maggie Germano on Sept. 22, 2020, cites a paper authored by two women, Claire Costello and Jackie Vanderbrug. According to said paper, women are making 90 percent of the financial decisions in American households. The financial decisions are not necessarily limited to the usual domestic purchases like groceries and home improvements, but also in decisions pertaining to investments and philanthropic initiatives.

To bring these concepts closer to home, the idea of women as key players of the investment community is further validated by the 2020 PSE data in its profile of retail investors, which showed almost gender parity with 50.8 percent being male, just slightly higher than 49.2 percent female, and the reverse for online accounts, with women accounting for 50.6 percent of the total number of accounts, compared to men at 49.4 percent.

Further, in a recent survey conducted by COL Financial, one of the country’s leading brokerages, among its new women clients for 2021, the results showed that: 1) Women are more confident about their investing knowledge with almost 77 percent% indicating they had good to extensive knowledge; 2) Women were more active, with higher average trades, about four per month; 3) Women accounted for 35 percent of total trades in 2021, higher than 32 percent in 2020.

And when COL Financial released an announcement for a webinar, 87 percent of the respondents were female, while only 13 percent were men. Inferring from these figures, a possible reason for the higher interest from women could be that they are now more knowledgeable in handling family finances.

Women as better investors: The evidence is clear

Many finance experts and analysts have written about the traits inherent in females that may make them good investors.

Good savers: Women tend to save more and are more disciplined in their savings, leaving them with funds that they can invest to create and grow their wealth.

Diligent in research: Although not always well-versed in finance, women make it a point to study and do more research and understand the risks before making an investment decision. They may ask for advice from experts, and this is one instance where women do not practice “impulse buying,” which could be the case when they purchase groceries or shop for personal items.

Responsible risk-takers: Perhaps because of the fear of possibly losing the household funds that they are managing, women tend to choose lower-risk investments that are considered to be relatively “safer” and will provide adequate returns to support the family’s needs.

Disciplined: Women have a tendency to follow rules on trading and investing, and would usually adhere to their plans and not change them abruptly. Women also would typically not make impulsive decisions when it comes to such investments.

Patient and nurturing: Borne by their maternal instincts, women investors may have more patience and take a longer-term view, and are more likely to be willing to give an investment the time to perform well.

Empathy: Women’s intuition enables them to be attuned to trading cues in the market when monitoring their investments.

Investing for financial empowerment

The Philippine Business Coalition for Women Empowerment (PBCWE), a business organization made up of influential businesses and large employers, has pursued an initiative to financially empower women. In line with its commitment to improve gender equality in their own workplaces and to influence businesses, both in their supply chains and other large businesses, and to also become better employers of women. In 2019, PBCWE, in partnership with Insular Life (InLife), launched a financial literacy training program “Shaping Her Future: the Sheroes Guide to Financial Freedom.”

The training module consists of three parts: Basic financial literacy, investment planning, and estate planning. It seeks to provide employees, particularly females, with basic personal financial management and equip them with the knowledge to make sound financial decisions in various stages of their professional life. This is part of InLife’s program that aims to empower at least one million Filipinas and expand their access to risk-mitigating solutions and investment opportunities by educating them on financial management, health, and well-being, providing network access to business partners, and solutions to women-specific concerns. Get more financial literacy tips from InLife Sheroes at https://www.inlifesheroes.com/lifestyle/financial-literacy.

At the time of this writing, I wear my hat as an advocate for women empowerment and offer this advice to potential women investors: You have what it takes to be a good investor. I encourage you to start investing to achieve financial equality and independence. Be more proactive and become more involved and aware of the financial affairs of your household. Being aware and financially literate, will help secure not only your financial future, but more importantly, the financial future of your family.

The author, Ma. Aurora “Boots” D. Geotina-Garcia, is the vice chairperson of SharePHIL and co-chair of the PBCWE, the inaugural project of the Philippine Women’s Economic Network (PhilWEN) where she is founding chairperson and president. Boots is also president of Mageo Consulting Inc., a corporate finance advisory services firm.

Learn more about investing and go farther in your personal finance journey by joining the SharePHIL mailing list at https://bit.ly/subscribe20210224.

Like and subscribe to SharePHIL on Facebook at fb.com/SharePHIL and YouTube at youtube.com/c/SharePHILonYT