Gender Differences In The Investment Decision-Making Process

Researchers and financial practitioners have suggested that women choose to invest their financial resources more conservatively and are generally more risk averse than men (Bajtelsmit & VanDerhei, 1997; Bajtelsmit, Bernasek, & Jianakoplos, 1996; Hinz, McCarthy, & Turner, 1997; Yuh & Hanna, 1997). As a conservative long-term investment strategy can result in a lower accumulation of investment assets (Siegel, 1994), there may be serious implications for women who adopt such a strategy when planning for long-term financial goals. Planning for a comfortable retirement is a good example of a long-term financial goal. The simple fact that women can expect to spend as many as five more years than men in retirement implies that retirement goals cannot be attained in the same manner for women as for men (U.S. Bureau of the Census, 1996, Table 120). The retirement planning problem is compounded by the fact that women, on average, have significantly lower earnings than men while needing to accumulate higher overall levels of