Joan Perry earned an MBA and worked on Wall Street for two decades, but for many years she instinctively handed her paycheck over to her husband to deal with the family finances. “It was crazy,” recalled Perry, founder and president of an investment firm in Los Gatos, Calif., and author of “A Girl Needs Cash” (Times Business, $23). “Today, women are waking up to the financial part of their lives.”
And the investment industry is waking up to potential profits by trying to appeal to the large number of employed, female Baby Boomers. Several books on “women’s” investing have been published recently, and most of the large national brokerage houses have specific marketing tools aimed at the female investor segment. PaineWebber, for example, published a 38-page guide this summer entitled “Beyond the Basics: Investment Strategies for Women” and trotted out a senior female investment strategist, Mary Farrell, to promote the marketing effort.
“Today more than 42 percent of all investors are women, and that percentage is growing rapidly,” the booklet declares. “In part, this interest reflects changing economic realities — from the growing number of women in managerial and executive positions to concerns about the likelihood of collecting Social Security benefits.”
Why do women managers need investment strategies of their own? In large part, Farrell said, for the same reasons women’s career paths still so often diverge from men’s. They are more likely, for example, to enter and leave the labor force several times over the course of their lives to raise children or care for an ailing parent, both of which can drastically reduce pension and other savings vehicles, Farrell said. “Thus, they build far less retirement security and they live longer than men,” an unsettling combination, she said.
And then there’s the wage gap: Women account for 49 percent of average investors, but only 35 percent of investors with assets of more than $200,000, according to research PaineWebber commissioned from the Gallup Organization. Twenty-six percent of female investors have incomes above $75,000, compared with 33 percent of male investors. Finally, Gallup reported that less than half of women investors (46 percent) said they felt comfortable with their ability to understand investment issues, versus two-thirds of men.
“Most women were brought up (without getting the skills) to take control of their finances,” Farrell said. “But today women want to be educated consumers. They don’t want a phone call from a broker telling them to do something; they want to know why. And they’re less likely to just take a hot tip at a cocktail party.”
The PaineWebber booklet offers common investment vocabulary definitions, tips on researching individual securities, choosing mutual funds that match your goals, and evaluating fees and performance.
Whether they are saving for retirement or children’s education, women investors in general need to evaluate the aggressiveness of their portfolios, Farrell said. “Stocks have been bullish, but there’s a lot more to go. No other asset class comes close,” she said, recommending that a balanced portfolio have at least 60 percent of its assets in stocks. In other words, not much different from what investment planners recommend for all their investors, men and women. But it is the marketing approach that’s different, and consumers should evaluate those pitches carefully, Perry said.
Before she wrote her book, Perry said, she was approached by a major U.S. investment house to help market a new investment program for women. “I was appalled at what they sent me,” she recalled. “They were trying to herd women into one of their mutual funds that had substantially underperformed the market.”
How to separate good advice from slick campaigns? “Bottom line, a woman has to trust her instinct and act,” Perry said. “We know what quality is. Approach investing simply: Only buy what you know about and keep a limited number of stocks and mutual funds.”
Also, Perry said, remember that the first step in investing is learning to save money.
“Credit cards have been marketed to us like cigarettes to teenagers,” she said. “It’s one more thing we don’t need.”
To get a copy of PaineWebber’s investing booklet, call 1-888-795-2001, ext. 575. Other information about women investors is available on the company’s web site, at www.painewebber.com.
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E-mail: kiddstew@msn.com
