How Investment Works In Mars vs. Venus

Power struggle

Ever heard of Geraldine Weiss? How about Hetty Green? Or even our very own first female Bank Negara Malaysia’s governor, Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz? They are just some of many notable female figures in the finance sphere but when speaking of finance, chances are the mind conjures an image of men in suits looking dapper, brimming with self-confidence and exuding an air of success.

Historically, women have had less involvement in financial matters, but what else separates men and women when it comes to their approach to finance?


To shed some light on the sophisticated relationship between women, men and money, here some areas that men and women differ when it comes to personal finance.

Risk appetite

Men are often considered to be greater risk-taker (i.e. higher risk appetite) when it comes to matters concerning finance. Evaluating data from more than 8,000 men and women, the German Institute for Economic Research (DIW) found that 45% of men have risky investments such stocks compared to 38% of women.

Despite this finding however, the DIW believes that this has more to do with the fact that women generally have less funds to invest, compelling them to be more cautious rather than a generalisation that women are naturally averse to risk.

A 2012 salary survey report by the Department of Statistics, Malaysia seems to confirm DIW’s opinion that men earn more than women (although not by much). The survey revealed that the mean monthly salary of men was RM1,906 compared to RM1,838 earned by women. 

Level of confidence

The measure of confidence where money is concerned appears to be who men and women decide to work with and the characteristic of their financial decisions.

According Circle Wealth Management’s partner Ann Kaplan, women place utmost value on working with a trusted advisor and take longer to arrive to a decision – which implies lower self-confidence but a more careful and calculated decision.

In contrast, men tend to be overconfident, which may not necessary bring positive results, as they are more inclined to make snap decisions and will work with anyone they believe can earn them a higher return.

However, a study by the German Comdirect Bank and the DAB reveal that lower confidence in women does not translate to poorer investment choices and management. A sample of half a million portfolios demonstrate that in 2007 and the subprime crisis year of 2008, women did 4% to 6% better than men.

Investment strategy

A study conducted at the Centre for Financial Research at the University of Cologne found that female fund managers switch around their portfolios less than their male colleagues. Furthermore, women’s strategies and the subsequent performance tend to be more stable.

Based on the same study, it is also documented that funds managed by male fund managers are more likely to achieve extreme performance ranks, as opposed to their female counterparts. However, the latter’s performance is more persistent. As the age-old investment advice goes, the higher the risk, the higher the return.

Career limitation

A contributing factor to the different approach to finance by men and women could simply be due to the fact that finance is widely regarded as a male-dominated profession; a December 2012 survey conducted by Catalyst Research shows that out 55.6% of female workforce in the US, only 16.6% are executive officers, 18% are on the board of directors, and 2.9% are CEOs.

Christine Schmid of Credit Suisse believes that women gravitate to where there are other women which could further explain the figures above.

The inequality is glaring but the barrier appears to be eroding. In Malaysia, the number of female professionals who are actively contributing to the development of Islamic finance is growing. An article published by Free Malaysia Today states that a list in the February issue of ISFIRE, a quarterly magazine published by the London-based Edbiz Consulting Ltd, revealed that 15 out 20 top women in Islamic finance are Malaysians.

So, the jury may still be out on the question of which gender is better at money and investment. It is also a question that most academics are trying to find an answer to.

However, it is undeniable that women are beginning to get in the game of investment and emerging as a force to be reckoned with in the financial world.

Putting aside the question of who is better, let’s settle for both genders approach investment differently. As the American author and relationship expert, John Gray said, men are from Mars, and women are from Venus — naturally, there are distinct differences between men and women.

Want to get into the exhilarating world of investment? Read about unit trust investment for beginners here. 

If you are the risk-averse type, find out why sometimes it pays to take a leap of faith with bonds investment

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