An Argument (and Evidence) for Women's Touch in Investing

This site has noted how commentators galore, from the New York Times columnist Nicholas Kristof to a top British investment firm economist, agree: More women might well have prevented much of excessive risk-taking that precipitated the current economic turmoil.

But do women in the financial business really take a different approach from men? There are studies showing that testosterone increases as male traders profit and make ever greater bets. As for feminine restraint, there is anecdotal evidence galore, and some scientific data, but The Mail points out that plenty of women, perhaps most famously Nicola Horlick, lived on the edge as well, and have fallen just as much as the alpha males of the City and the Street.

The article quotes Halla Tomasdottir, the Icelandic fund manager who predicted the economic crash, as saying, “Unfortunately, there has been an extreme lack of balance in the business world. While male values are about risk-taking, short-term gain and a focus on the individual, female values tend towards risk-awareness, the long term and team goals. What is needed for a successful future is a better balance of the two and a greater focus on long-term sustainability.”

Barclays Stockbrokers director Barbara-Ann King says, “Women invest in stocks they feel good about, on both a personal and ethical level. They also take time to research investment choices. This means women are attracted to companies with better long-term prospects.”

Joanna McLaughlin, a trader in the fuel markets, says, “Women are undoubtedly more cautious and think things through before taking the plunge. They think more long term about the implications of their actions and also consider different scenarios.”