Perceptions to the Contrary, Women Investors Are on Equal Footing With Men

Perhaps you've noticed -- or not, depending on your gender -- but everywhere you look these days there's another seminar, workshop, book, magazine or Web site devoted to women and investing.

What's all the fuss all of a sudden? Long-overdue consideration of an underserved population with particular -- maybe even unique -- needs? Or simply the gross exploitation of a relatively untapped market?

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Probably some of both. There's no denying that businesses of all kinds have recognized the potential of the so-called women's market. It's also true that many women thrive on the support of other women and appreciate targeted information. I just don't want to see investing Barbie-ized.

Do women really need special seminars, chat rooms all their own and a separate reading list? After all, a 30-year bond is a 30-year bond is a 30-year bond. And it will pay 7% whether the person clipping the coupon wears a skirt or trousers.

Don't misunderstand. I'm aware -- believe me -- that women have a very different relationship with money than do men. Women live longer, earn less, lose more in divorce and enjoy fewer retirement benefits. But here's the beauty of the market: Women can be dead-even with men when it comes to investing because a stock will go up or down in the exact same way for either of them.

A Long Way Baby From financial parity, that is
	Women	Men
Average salary	$23,719	$32,144
Assets in stocks	14.6%	27.6%
Handle family investments	15%	38%
Average life expectancy	79 years	72 years
Avg. annual investment club returns	32.1%	23.2%
Source: A Woman's Guide to Investing, National Association of Investment Clubs

Yet research suggests there are differences both in the ways men and women invest and in how they react to market swings. An oft-quoted study by University of California-Davis finance professors Terrance Odean and Brad Barber analyzed accounts from 35,000 households at a discount brokerage. Odean and Barber found that men traded 45% more than women, earning annual risk-adjusted net returns that were 1.4% less than those earned by women. Single men traded 67% more than single women and earned 2.3% less.

Dalbar, the Boston-based mutual fund research firm, surveyed 1,100 households about market volatility during the second half of 1998. Only 53% of women surveyed viewed the turmoil as a buying opportunity, compared with 66% of men. And while third-quarter mutual fund losses were widespread, 58% of the men claimed to have made money while only 36% of women said they made a profit -- despite little difference in the investment mix between men and women.

Such studies seem to suggest that female investors are less aggressive than their male counterparts, more risk-averse and certainly not as cocky. Are such gender differences part of our biology? Or are they cultural, a function of being behind men on the investment learning curve?

"It's not clear," says Odean, who cites research on both sides. And while most people would advocate eradicating discrepancies between wages, benefits and divorce settlements, I'm not sure we want to wipe out the differences between and men women investors, at least not by making women more like men.

For starters, quips Odean, "You didn't see as many women jumping out of buildings in 1930," after the stock market crash. Also, well, just look at the numbers: It seems the ladies are beating the men in the investment clubs as well as at the discount brokerages. According to the 1999 survey of members by the National Association of Investment Clubs, male-only investment clubs average an annual return of 23.2% over the life of the club, while women-only clubs return an average of 32.1%.

Men Not Allowed

That's why the Dynamic Women Investors of Livingston County in Michigan don't let men in their club. "Statistically, women do better," says founder Mary Sullivan. (Actually coed clubs have the best records, beating both men-only and women-only clubs with an average 33.4% annual return.)

But there's another reason for the Livingston ladies' exclusivity, says Sullivan. "If there were men in the group they'd be more bossy and they'd try to override our decisions." That's the real reason there's a market for the seminars, the books and magazines and the chat rooms. Many women -- especially the ones with gray hair -- feel more comfortable among their own. I'm not going to knock it if it works for the ladies of Livingston County, or anywhere else.

But I also know that it doesn't always take an iVillage (IVIL Quote - Cramer on IVIL - Stock Picks) to pick a stock. And I'm not alone when I say I find a lot of the women-only investment fare patronizing.

Take Equity magazine, the occasional Worth supplement for women. Slick, glossy, well-written. But of all the stocks to profile in this history-making bull market, why choose Avon (AVP Quote - Cramer on AVP - Stock Picks), a Nifty Fifty casualty that lost nearly 90% of its value in the 1973-'74 bear market and took 25 years to (briefly) regain its old high. Because it sells makeup? C'mon. What's the rationale for the winter 1999 issue's "trip to the mall" to investigate apparel stocks? Women love clothes? Give me a break!

I may be oversensitive, but seeing clothes and makeup stocks hyped in a women's investment magazine makes me feel like a kid whose parents bought her shares in Wrigley (WWY Quote - Cramer on WWY - Stock Picks) for the chewing gum they send to shareholders each year. I like shopping and lipstick as much as the next gal. But when it comes to opportunities for my money I'm at least as interested in the next telecom highflier or the growing pricing power in the aluminum market as I am in Old Navy's spring line.

I don't mean to pick on Equity, which has plenty of insightful articles. On the Womenswire.com Web site (www.womenswire.com ), one that's popular and highly regarded judging from the posts I read in several forums, I get this advice, from "Ask Cash Flo," on how to start investing on your own:

First, join a club. Second, invest in companies whose products you like. Third, read ValueLine. Fourth, get Cash Flo's 1998 investment guide at the library (at least she doesn't hawk it outright) in which she recommends specific stocks, bonds and mutual funds in sample portfolios. "These portfolios are individualized and designed for different times or stages in our lives, so you can pick the one that's exactly right for your age." (Emphasis mine.) I'm not gonna say anything.

Online Resources for Women

Of course there are many, many good resources out there packaged for women. Vanguard's brochure "Plain Talk: Women and Investing" is an example. Cassandra's Revenge Web site (www.cassandrasrevenge.com ) is wickedly witty as well as informative. A Women's Guide to Investing is a helpful primer from OppenheimerFunds. But then, just about any Vanguard booklet is worth reading. And there are plenty of good general-interest investing Web sites. (Hey, how 'bout this one?) As for books, I'd rather recommend classics like Jeremy Siegel's Stocks for the Long Run.

So while I think it's a good thing that Wall Street is scrambling to meet the needs of 50% of the investing population (52% of the general public), I suspect and hope that many of these "feminized" products and publications harbor the seeds of their own demise. After all, once you can discourse intelligently about dividend discount models, you don't really need fashion models to make it interesting.