Welcome to the month of March!
On Tuesday, women all over the world will celebrate International Women’s Day – an annual event celebrated on the 8th of March. Our discussion this week would be on this year’s theme – “Breaking the bias”.
We would be looking at how as women, we can break the bias with respect to personal finance and wealth creation.
The word bias can be defined as inclination or prejudice for or against one person or group, especially in a way considered to be unfair.
Although research has shown that women are naturally better at managing finances than men, this hasn’t necessarily translated to global acceptance of this fact.
Today, we would be looking at some common biases when it comes to women and their finances:
- Women are risk-averse: many people tend to view risk-taking as a masculine trait and as such assume that women are unwilling to take risks, especially with their funds.
- Research has actually proven this to be inaccurate. In reality, women on the average are risk-takers but are more calculating and aware of their actions. Women investors tend to require more information than their male counterparts before committing their funds.
- Women have been proven to be less sensitive to market fluctuations than men. Men tend to react faster than women and thus buy or sell their positions faster; which generally cost more.
- In reality, this translates to the fact that many women would rather patiently build a cash war chest than invest in speculative deals. This major con here is that such asset positions tend to be low income generating.
- Women are emotional investors: Although there is an element of truth here, this is definitely not the case for all women investors.
- Women would rather know the facts about what they are investing in than be left in the dark.
- Women tend to use known facts as a basis for investing whilst men tend to rely more on their instincts.
- Their emotions, however, tend to come into play when these transactions relate to family and friends. For example, many women would invest in their husbands’ or children’s business or transactions than decline even if or when it is speculative.
The truth is that women tend to be better investors in the long run than men; although a fewer percentage do invest. The time is to change that is now and every female investor has the responsibility to make more “disciples” in this regard.
Till next week, here’s wishing us all a wonderful week.
Toyin Oguntuyi