WOMEN'S MONTH
18
WOMEN'S MONTH
31 August 2018
Women pick the best performing shares: Survey
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omen are better at investing, according traded nine times a year on average, compared to the latest analysis of 2 800 Barclays to 13 times for men – the biggest difference, and Smart Investor customers in the the one that impacted their returns, came in their United Kingdom. The survey found that not appetite for the type of stocks they invested in. only did the female investors outperform the When surveyed by Professor Stewart’s team, FTSE 100 over the last three years, but they also female investors were less likely to indulge in the outshone their male counterparts. ‘lottery style’ of investment that appealed to men, While annual returns on investments1 for men according to the research. The Warwick Business were on average a marginal 0.14% above the School analysis defines ‘lottery style’ investing performance of the FTSE 100, annual returns on as a tendency to invest in more speculative, the investment portfolios held by women were lower priced shares that might increase in value 1.94% above it. This means substantially, along with a desire to returns for women investing keep to shares that show a loss while with Barclays outperformed selling off their winners – the ones MEN ARE JUST men by 1.8%. that have actually increased in value. A LITTLE MORE The analysis2 was carried Clare Francis, Director for LIKELY TO BE out by Professor Neil Stewart Savings and Investments at at Warwick Business School, DRAWN TO MORE Barclays Smart Investor, says the University of Warwick, which difference in performance reveals SPECULATIVE compared male and female a more considered approach from investors through Barclays women, rather than caution. She STOCKS and their trading behaviour explains: “The stock market is often over a 36-month period. This looked at a range portrayed as a high-energy, risky environment, of criteria, including the type of investments but this analysis shows that taking a more held, age, trading frequency and the amount of long-term view about what to invest in, rather money invested. than picking eye-catching and potentially more While there were significant differences volatile shares, is actually likely to provide a between the genders – women, for example, only better return on your money.
Women urged to take responsibility for financial wellness
Dr Dominique Stott, Chief Medical Officer, Liberty
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r Dominique Stott, Liberty’s Chief Medical Officer, has built a career in both medicine and financial services. “I decided during my medical studies that treating patients was not necessarily the best avenue for me,” she says. “Choosing to treat patients is an individual choice – and at that point there were limited opportunities outside clinical medicine available.” By chance, during her internship, she was told of a job that was being advertised at Liberty in Johannesburg. “I weighed up my options and applied. I got the job, starting at Liberty in 1991, and I’ve loved it ever since. It just happened to be the niche for a doctor who doesn’t necessarily practice – and it meant working office hours with no patient responsibility but rather responsibility to the company.” According to Dr Stott, there is a general opinion in the insurance industry that women are underinsured. “Women often do not have their own insurance or investments in place. They rely on their husbands or male partners – or their employers if they’re unattached. That’s not the right way – they should have a deep understanding of their financial situations.” Should a woman fall ill or become disabled and is unable to work, she needs to have a plan in place that can assist her – or her dependents – to pay for their monthly expenses. Women are becoming increasingly financially independent and are the main breadwinners in some households. Dr Stott adds that across the industry around 60% of policies are taken out by men and only 40% by women, indicating the gap that exists.
“The research shows that you really don’t have to be a stock market genius to invest. Opting for funds, rather than individual shares, can help reduce the overall risk and over time, hopefully result in good returns that will be better than you’d have achieved if you’d kept all your money in cash, albeit that cash provides certainty. It cannot fall in nominal value.” Professor Stewart adds that the tendencies displayed by people, such as investing in more speculative stocks and not wanting to let go of shares showing a loss, are no real surprise. “If you have ever watched a bad movie to the end, you are having trouble letting go of a loss. If you have ever bought a lottery ticket, you have been attracted to big wins, but wins that are very unlikely. “Men are just a little more likely to be drawn to more speculative stocks whereas women are more likely to focus on shares that already have a good track record. Women also take a more long-term perspective, trading less frequently. This possibly means women are investing more to support their financial goals, whereas men are attracted to what they see as the thrill of investing,” he says. Annualised portfolio returns Analysis of trading data (2012 to 2015) and customer survey (2017) 1 2
A lack of confidence or a lack of knowledge means that most women do not take on financial responsibility themselves. “Female dread disease policies have been developed but women are not grasping these opportunities and using them to their advantage,” she adds. Among women, cancer is the major dread disease by far – breast cancer, colon cancer and lung cancer. “There isn’t an awful lot you can do to prevent cancer, apart from not smoking and not being obese, unlike cardiovascular disease. Cancer is happening in all age groups among women.” Dr Stott is adamant that women should have their own financial advisers and consider taking out policies in their own right. “There’s a tendency for women to have the same financial advisers as their husbands, but if there’s difficulty in the marriage, the husband moves on and the policies taken out aren’t necessarily the best thing for the wife. It really is better for women to seek out their own financial advisers.” She cautions that it’s important for women to take out dread disease cover when they’re young and healthy. “Once there is a change in health, it becomes hard to get the cover needed.” Dr Stott adds that the role of a housewife is an undervalued occupation. “This is a role that is often taken for granted and is more financially valuable than its given credit for, considering the burden of household duties and childcare. In this instance, a husband should make sure his wife has sufficient cover in place, so that if she becomes seriously ill or dies, cover is provided.”