The number of wealthy women is growing globally and is "destined to rise" even further, according to a Merrill Lynch study.
The World Wealth Report 2002, published by Merrill Lynch and Cap Gemini Ernst & Young, also found that more women are likely to cross the threshold into the High Net Worth Individual segment as their assets grow. High Net Worth Individuals (HNWIs) have financial assets of more than U.S. $1 million, excluding real estate.
Some research suggests that women investors sometimes do a better job than men. For example, a recent UC Davis study found women investors fared better than men between 1991 and 1997, mainly because women didn't try to catch short-term swings in the market. Women tend to be conservative, and more risk-adverse investors than men, who trade 45% more often than women, according to the study.
The number of women investors is growing fastest in North America, particularly in the U.S., according to Merrill’s report. The study says that North America has more female HNWIs, and that women already make up 43% of the North American affluent segment (above $500,000 in financial wealth), and the percentage is destined to increase.
The report also says the number of wealthy women investors in the U.S. is growing at a faster rate than that of men. From 1996 through 1998, the number of wealthy women in the U.S. grew 68%, while the number of men grew only 36%, a study by The Spectrem Group reveals.
According to a Merrill Lynch broker, "When it comes to women, they are faced with a different set of issues about money and finances. First, it’s a known fact that women they generally live longer than men, and that they earn less pay, and receive less of a pension [than men]. And also, traditionally, women also leave money on the table because they have not been educated about finances."
But that’s changing, according to reps.
Women are faring better than men in investing, possibly because they’re becoming "more savvy" as a result of seminars, books, the Internet and investment clubs, according to a female rep with Salomon Smith Barney.
"I have many women clients who have grown enormously, educationally, over the last few years because of seminars, investment clubs, and the like," the broker says. "More and more women are becoming smarter and smarter when it comes to money and finances, and it’s because they have the money and they’re learning about the best ways to invest it."
According to the study, as well as other financial advisors, both female and male, say there are several other reasons women investors often do better than men in investing. Women tend to do more research before investing; they don't act on emotion or upon receiving "hot" stock tips; they invest consistently, often following a long-term investing approach; women are patient and hang on to investments they research and purchase, riding out the ups and downs of the market rather than jumping in and out of a stock; women are consumer-oriented, and they generally purchase stocks of well-known consumer companies that have proven profitable from the sale of their goods or services to the public.