(MONEY Magazine) – THE FIVE WAYS WOMEN ARE OFTEN SMARTER THAN MEN ABOUT MONEY LIKE THE 20 TOPNOTCH INVESTORS PICTURED IN THIS ARTICLE, MORE AND MORE WOMEN FACED WITH FINANCIAL DECISIONS TODAY ARE DOING THEIR HOMEWORK, SEEKING INTELLIGENT ADVICE, STAYING COOL UNDER PRESSURE AND REMAINING PATIENT ENOUGH TO ACHIEVE THEIR GOALS. IN SHORT, THERE IS STRONG EVIDENCE THAT WOMEN ARE SAVVY ABOUT MONEY. For more than 20 years, Thomas O'Hara's Bloomfield Hills, Mich. investment club had posted annual losses. Then, in 1982, the all-male club, composed of 18 former Wayne State fraternity brothers, decided to let their wives join the group. Within four years, the feminine investing mystique had tripled the club's stake, taking it from $180,000 in 1982 to a cool $500,000 in 1985. ''Things just turned right around once the women started picking stocks,'' recalls 76-year-old O'Hara. ''It was pretty amazing.'' O'Hara, who has been chairman of the National Association of Investment Clubs in Royal Oaks, Mich. since he founded the organization in 1951, has been in the right place to observe that women investors are often winners. For the past 10 years, 50% of the members of NAIC investment clubs (groups that meet informally to pool resources and pick stocks) have been women, up from 25% during the prior 30 years. And beginning in 1981, NAIC's 2,000 all-women clubs have outperformed the 2,900 all-men clubs in seven out of the 11 years. Those results, plus other factors, strongly suggest that as significant numbers of American women have tackled money matters in the past 10 years or so, they have proved themselves to be not only as capable as men but superior to them in several ways. ''Women have what it takes to invest and manage their money successfully,'' says Bridget Macaskill, president of Oppenheimer Management of New York City. She ought to know. Her firm has just completed a major national survey of men and women's financial attitudes, which has been released to MONEY exclusively (see page 79 for the results). ; Traditionally, women have been cast as the shoppers who paid the day-to-day bills and who juggled household budgets. Beginning in the 1980s, however, cultural and demographic changes have motivated women to develop their financial planning and investing skills as well. Largely because of inheritances from their late husbands, women in America have long owned a great deal of America's personal wealth. In fact, 43% of individuals with assets of $500,000 or more are women, and they also make up 35% of the country's 51 million shareholders. Now women's active influence in financial affairs is rising nationwide: Out of the country's 127 million women, more than half work outside the home (vs. 34% in 1950), 56% pay all the family bills, and 95% make family financial decisions jointly with their husbands. Moreover, today, 30% of the nation's 14 million individually owned businesses belong to women, up from a mere 7% five years ago. The driving force behind many women's heightened financial sophistication can be summed up in one word: necessity. Nine out of 10 American women are expected to be in charge of their own finances at one time or another: Today, more women than ever marry later and get divorced, and wives outlive their husbands by about seven years. And with the country's dominant population group -- the baby boomers -- aging, millions more well-educated women are facing the likelihood of a widowhood with money. Besides those facts of life, women realize their wages and benefits still lag those enjoyed by men. Therefore, increasing numbers of them feel compelled to compensate by managing and investing their money more wisely than men. Despite women's recently achieved 52% majority in the workplace, they earn 29% less annually than their male counterparts and receive just 36% of national income. More ominously, 61% of women working today do not have pension plans (vs. 53% of men) and, despite living longer, 76% of retired women do not receive any pension benefits (vs. 54% of men). ''Women,'' says Christopher Hayes, director of the National Center for Women and Retirement Research in Southampton, N.Y., ''have less control than men do over financial aspects of their lives.'' As a result, women want to learn, says Barbara Hughes, director of the American Association of Retired Persons' Women's Financial Information Program. In the first three months of this year alone, more than 10,000 women attended financial education seminars conducted by AARP -- already half the number who attended during all of 1991. And once given some training, women seem able to do anything that men can do financially -- at the professional level too. For example, a study for MONEY by Morningstar, the Chicago-based mutual fund rating service, compared the performance of 124 female and 965 male mutual fund managers in 23 fund categories over a three-year period that ended in March. In 13 of those categories, the female managers topped the males' return. With only the records of today's highly motivated women to judge by, we don't yet know whether women will maintain their edge as many more get involved in stock picking and other financial pursuits. However, women do seem to have an aptitude for money management. In interviews with MONEY, more than two dozen financial planners, stockbrokers, psychologists, academics and money managers said that even when women don't have specialized knowledge about financial matters, they tend to have the patient temperament and analytic attitude needed to do a better job with their money than men usually do. ''Overall,'' concludes Robert Maloney, 45, president of R.E. Maloney Associates, a Georgetown, Conn. financial planning firm, ''women are better suited to making financial decisions than most men are.'' Not everyone would agree, of course. ''Both men and women can be equally wise about money matters,'' says Thomas Stanley, the author of Marketing to the Affluent (Business One Irwin, $55). ''The difference is that men have the confidence to capitalize on their smarts, while women are still learning.'' Maybe so, says Victoria Felton-Collins, the author of Couples and Money (Bantam, $4.99). But personally she thinks women's self-doubts as beginners actually work to their advantage: ''For ages,'' explains Felton-Collins, ''women have been socialized to believe that we can't compete with men -- physically or mentally. That in turn leads to self-analysis and introspection. When the tendencies toward research and thoughtfulness are harnessed in the service of financial decisions, women can be very effective.'' The experts cite five basic characteristics associated with women that are also essential qualities for smart financial decision-making:

THEY ADMIT IGNORANCE Most men are familiar with the mechanics of financial markets. The Oppenheimer survey, for example, showed that nearly four times as many men as women could quote the previous day's closing price of the Dow Jones industrial average % within 100 points. And 40% more men understood that bond prices typically fall when interest rates rise.

''But knowing where the Dow closed doesn't mean that you know how to invest,'' says Denver financial planner Eileen Sharkey. ''The biggest mistakes people make are usually because they can't admit they don't know something.'' Theorizes Felton-Collins, also a psychologist and financial planner: ''Men tend to think they know it all, even when they don't. Women tend to doubt they know it all even when they do.'' In other words: Men often act on incorrect assumptions. Women admit they don't know, ask questions -- and then act.

THEY SEEK HELP Many men hate to ask for help -- whether they need directions because they're lost or financial assistance when they're out of their depth. ''A lot of men view asking for help as wimpy, as an affront to their masculinity,'' says Robert Stinerock, an associate professor of marketing at Fairleigh Dickinson University in Rutherford, N.J. who has studied the behavior of men and women in financial matters. Women, on the other hand, ''don't get caught up in the game of who knows more,'' says New Providence, N.J. financial planner Diahann Lassus. ''They just want the best solution.'' Indeed, in a recent survey by Phoenix-Hecht/ Gallup, men were 25% more likely than women to say they didn't require investment advice. And this difference in attitude has ''indisputable consequences,'' says Luther Gatling, president of the nonprofit Budget and Credit Counseling Services in New York City. ''Women come to us much earlier with debt problems than do men,'' says Gatling. ''By the time a man admits he needs our help, he's in much deeper water.''

THEY AVOID RISK Women, say planners, are more conservative than men -- a characteristic of smart money management. ''Conserving capital is key,'' says financial planner Maloney. ''Before thinking about making money, you have to worry about losing it.'' (For help on this score, turn to ''Nine Funds That Never Lose Money'' on page 114.) But it doesn't pay to be too conservative. ''Women sometimes lean toward investments that are too safe,'' says Anne Greenwood, a Smith Barney stockbroker in Boston. The results: low returns. For example, when Tamar Opler's husband died 20 years ago, the New York City psychotherapist, now 49, put his $50,000 estate into savings accounts earning 5%. ''But I read magazines and realized I was losing by not taking chances,'' says Opler. She eventually shifted into equity mutual funds, utility stocks and, lately, global stock and bond funds. She's posted average annual returns of 15% in the past four years. In most cases, though, caution is an asset, not a liability.''Women are less likely to fall prey to investment scams than men are,'' says Esther Berger, a financial planner at Paine Webber in Beverly Hills.

THEY DO HOMEWORK Men are much more likely to act first and think later. Women pay attention to hunches too but then tend to follow with careful research. Consider Carole Black, 59, a divorced retiree from Rancho Palos Verdes, Calif. who backs up her instincts with research. After noticing last year that her grandsons were crazy about Reebok shoes, Black analyzed the company's annual report, read magazine articles, talked to her broker and even quizzed a health-club instructor. Then, she bought Reebok at $16 a share in February 1991 -- and sold it nine months later at $27.75. And evidence is mounting that many more women are educating themselves. ''Most of the time,'' says Smith Barney's Greenwood, ''when a male client has an idea, he's heard it at the office, at the club or from a friend. With my female clients, it's a company or a product they've had some experience with. And generally, that's the smarter way to go.''

THEY SET GOALS When Marla Ahlgrimm graduated from pharmacy school at the University of Wisconsin-Madison in 1978, she set out to learn all she could about investing. But she wasn't trying to beat the market. ''I knew the things I wanted out of life -- to own a home, start a business, save for my retirement -- and I saw investing as the means to that end,'' explains Ahlgrimm, now 36. Today she owns a three-bedroom home, and the medical supply business she founded in 1982 employs 18 people. And her retirement savings, currently invested in a portfolio that includes tax-exempt bonds and stocks such as Merck and Microsoft, already total more than $400,000. ''I wanted to take control of every aspect of my life,'' says Ahlgrimm proudly. ''I wasn't interested in just counting my money.'' Ahlgrimm's approach is typical of today's modern woman investor. ''For men, money is about competition, making more than the next guy,'' says financial planner Eileen Sharkey. ''For women, money is about achieving specific goals. It's always better to think about goals because you don't get caught up in the adrenaline rush of the moment.'' Women not only wonder about their future, they also worry about it -- a lot. In the Phoenix-Hecht/Gallup poll, 20% more women than men believed they weren't saving enough for the family's needs or for their retirement. ''We call it the Bag Lady Nightmare,'' says Olivia Mellan, a Washington, D.C. psychotherapist. ''Even wealthy women worry that one day they'll end up homeless.'' Above all, that need for financial security is why so many women are promising themselves to get smarter about money. Says New York City therapist Opler, who, along with the other 19 women profiled in this article, has learned to make money do what she wants it to do: ''Handling money can mean anxiety, but the end result is that women can get a sense of power and control that they can extend to other areas of their lives. That feeling of freedom is the best thing of all.''