Investment risk is generally less acceptable to women than men, but our research shows that wealthier women act more like men than their less affluent counterparts when it comes to managing money.
Investment risk is a touchy topic for most women investors, who generally take a conservative approach to financial decision-making. High net worth women provide an exception to this rule.
Women in the top wealth tiers tend to invest more like men do, and show a higher appetite for investment risk, according to a series of wealth studies conducted by Millionaire Corner.
“Most wealthy women have enjoyed the same types of career success as wealthy men. They are likely to be doctors and lawyers, and senior corporate executives who contribute equally to the household income,” said Catherine McBreen, president of Millionaire Corner. “Their financial successes - and life experiences - appear to give them a higher tolerance for risk than women from lower wealth levels. In fact, the differences in investment styles between men and women narrow for individuals from the highest wealth levels.”
High net worth women, those with investable assets between $5 million and $25 million, are the most likely to describe themselves as “aggressive investors” - investors who are willing to place a significant portion of their investments at risk. Fifteen percent call themselves aggressive, compared to 10 percent of Mass Affluent women with investable assets of $100,000 up to $1 million.
More than two-thirds of high net worth women say they are “moderate investors” - seeking moderate returns and willing to place a limited portion of their investments at risk, and 10 percent say they are conservative investors willing to accept no investment risk. About 55 percent of the Mass Affluent say they are moderate investors, while 34 percent describe themselves as conservative.
High net worth women are divided equally over whether it is more important to protect principal than grow assets in the current economic environment, but the scale tips to the conservative for Mass Affluent investors. Nearly 60 percent of Mass Affluent investors put a premium on protecting their wealth, rather than seeking higher returns.
A greater percentage of wealthy women (64 percent) identify taking risks as a key factor in obtaining wealth, compared to Mass Affluent women (36 percent). Wealthy women are also more likely than less affluent women to attribute their wealth to education and smart investing.
Wealthy women are more likely than Mass Affluent women to invest in stocks, 43 percent and 17 percent, respectively, and international investments, 29 percent and 10 percent, respectively. They express more interest in purchasing real estate, 9 percent versus 5 percent, and precious metal, 10 percent as opposed to 7 percent.
Though they are more likely to take on investment risk, wealthy women are not so different from affluent when it comes to family concerns. Regardless of wealth level, women express a high level of concern for the welfare of their children and grandchildren, and the health of their spouses.