Invest like the opposite sex

@Money June 25, 2012: 7:36 PM ET

(MONEY Magazine) -- Men have a lot to learn about building wealth from women -- and vice versa.

This is part of a special report on 101+ ways to build wealth. In this story, experts weigh in with research-based advice on profitable ways the sexes can learn from one another.


Many studies during the past dozen or so years have suggested that women investors have better results than men, largely because their lack of confidence about their financial prowess stops them from making foolish mistakes.

The consensus: Women's portfolios generally beat men's by about one percentage point a year on a risk-adjusted basis.

Big deal, you say? Well, yes. On an account with $250,000 in assets and contributions of $10,000 a year, that extra point would translate to about $215,000 in additional profits over 20 years, if you average 7% a year on the portfolio rather than 6%.

Ask someone for directions. Nearly half of the men in a survey this year by BMO Financial Group said they didn't need help planning for retirement, vs. a third of the women.

Yet advice seekers tend to end up with more dough than those who go it alone.

Stay in the game. Vanguard reports that men were more prone than women to dump stocks in the 2008 market crash -- making it likely they missed the subsequent rally.

Women often wait a few days before executing a big move. Impose your own cooling-off period.

Know what you don't know. Over-confidence is the curse of male investors, a 2011 study by Barclays Wealth found. Men trade more often, and act on tips, because they trust their instincts and ability to spot opportunities. Women are more apt to do research before they act.


Compared with men, women tend to have slightly higher allocations to bonds than stocks. Yet because they typically live longer, they need to tilt more toward growth, says financial planner Eleanor Blayney.

Don't settle for less. Women negotiate salaries far less often than men, and when they do, they ask for -- and get -- less, reports Carnegie Mellon professor Linda Babcock. Cost over a career: about $500,000.

Asking outright for a raise, though, doesn't work well for women, a Harvard study found. Instead, use a more nuanced approach, framing the request in terms of how much you enjoy your job.

Do the math: The percentage of women who have estimated their retirement expenses is 44%, vs. 58% of men.

Women are also less likely to calculate how much income their savings will generate, according to the MetLife Mature Market Institute.

If you don't know, you can't plan. T. Rowe Price's retirement calculator can help.


Financial misperceptions abound among married folks, studies show. Husbands and wives disagree about who earns how much, what debt they have, and who manages the family's money.

To get the truth, which is essential to achieving goals, you and your spouse should use a money management app like Personal Capital.

More 101+ ways to build wealth To top of page

Help! We need a makeover
Young dad, $15,000 in credit card debt
Readers' Choice

Carlos Rodriguez is trying to rid himself of $15,000 in credit card debt, while paying his mortgage and saving for his son's college education.

$400,000 portfolio, too many holdings
Readers' Choice

Susan Carson and Laura DeLallo make $225,000 and have half a million in retirement savings, but their sprawling portfolios is proving hard to manage.

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.