Women and Investing

In response to the special financial challenges faced by women (live longer; earn less; take breaks from workplace) and recent research identifying characteristics of women that generally make them different investors with lower risk tolerances than men, a need has arisen for financial advice tailored specifically to women. Saturday’s “Your Money” column in the New York Times (here) highlights these investing differences and reviews several books and websites designed to meet this need for female-specific financial advice. While women are fortunate that these financial advising resources exist, they are less fortunate that the law has not yet recognized that women are different as investors. Courts and arbitrators judge the reasonableness of women’s investment decisions according to the “reasonable investor” standard — which is almost always a male investor, as historically more men were investors than women. Perhaps this gender-based research will lead to a much-needed recognition in the law that what is suitable as an investment for men may not be suitable for women.

-Jill Gross