The financial reality of investing for women

A woman walks past the Nasdaq martket site tickers in Times Square in New York City.

Conventional wisdom has it that Lehman Brothers would still be with us if only it were called "Lehman Sisters." It's a well-known belief, after all, that we women find investing scary, intimidating and are reluctant to take on risk in order to make financial gains.

I like to think of this as the "Men are from the stock market, women are from the passbook savings account" view of life.  But economist Julie Nelson says this isn't true and she has the data to prove it. Nelson recently reviewed two dozen academic studies on the topic of men, women and risk. And she discovered that researchers have made much hay out of small differences between the sexes, while downplaying their many similarities.

We are, it seems, conditioned to believe that women are more risk averse than men, so much so that we see evidence of it where little exists.

So what, you say? What's the harm? Well, this faux belief that we ladies won't take chances like the big boys allows society to downplay the real reason we have less in money in our investment accounts than men. The simple truth is we earn less money, $0.77 for every $1 a man brings home.

And, no surprise, researchers have found men are more likely than women to believe that if they suffer investment losses, they can recoup that money through paid work.

That's not testosterone in action. That's an acknowledgment of financial reality.

So, yes, I believe Lehman Brothers would still exist if only it had been Lehman Sisters. Those girls would have managed their funds better. They wouldn't have had a choice.

About the author

Helaine Olen is an essayist and author of book "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry."

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