Gender stereotypes about risk tolerance are a myth.
A couple came into Mike Giefer’s Minneapolis office in late September for some financial planning advice. The woman presented herself as the risk-averse one and her husband as the financial maverick. Then Giefer had them take a test. “It turned out the exact opposite,” he says. Giefer, an adviser at the Johnston Group, uses Riskalyze, an online tool that gauges clients’ risk tolerance by walking them through various financial scenarios and then assigning them a “risk number.” The woman scored a 70. Her husband, only a 52.
Women are often cast as conservative when it comes to investing, but the results for Giefer’s clients should be no surprise. In a sampling of 5 million users over the last five years, women fell pretty evenly across the risk spectrum, Riskalyze found in data provided exclusively to Bloomberg. Only 37 percent of women have a below-average tolerance for risk, 25 percent have an average tolerance, and 38 percent have an above-average tolerance. “The data show that the stereotypical risk-averse woman is not a reality,” says Aaron Klein, chief executive officer of Riskalyze.
Riskalyze did find that more men—about 51 percent—showed an above-average taste for risk. But when it comes to picking investments, women don’t act particularly risk-averse, even compared with men. Another recent survey of 640,000 investors by Stash, an investing app, found that about 50 percent of women using the app have put money in higher-risk assets including equities or aggressive exchange-traded funds, such as an asset-allocation fund that favors stocks. Men and women devoted about the same percentage of their portfolios, on average, to stocks—the more volatile investment.
“It seems especially small-minded to believe that the genders think completely differently,” says Carol Fabbri, an adviser in Denver with Fair Advisors. “I believe experiences with money shape people’s risk aversion, not their hormones.”
www.bloomberg.com
Read More
0 comments:
Join the Conversation