Does Gender Affect Investment Risk Taking?

The last time I checked women comprised about 15% of my mailing list. As a service to them, I often read articles on Women & Money and share the good ones that I find. Many articles have the same premise claiming that “women tend to invest more conservatively than men.” I just stumbled upon one that takes it a little farther.

The article states that a “Financial Gender Gap” study conducted by Prudential Securities revealed significant differences in how men and women invest. The study places investors in one of the following three zones: Action, Comfort and Caution.

More men than women were in the Action zone, while more women were in the Comfort and Caution zones, indicating gender differences in risk tolerance. Prudential has developed an Investment Personality quiz to help identify which zone you fall into.

Recent studies indicate that women are becoming more empowered financially and less likely to let lack of investing knowledge keep them from investing. That’s great, but a little knowledge won’t hurt. The bottom line is that it is important for women to become educated in the investment arena and become more risk tolerant to help secure their financial future.