Stocks vs. Bonds? How you invest and your tolerance for risk are heavily influenced by whether you’re a man or woman, according to the latest research by Millionaire Corner.
As a group, women express less confidence in their abilities to invest and are generally more cautious than men. True to form, high net worth women surveyed in December ranked cash products - including bank CDs, money market funds and Treasury bills - as their most likely investment in 2012. This conservative stance contrasts with the more bullish attitude expressed by high net worth men, who said they are most likely to invest in stocks and stock mutual funds over the next 12 months.
The large majority (56 percent) of high net worth women – those with investable assets of $5 million to $25 million – say they are likely to invest in cash in 2012, compared to less than half (49 percent) of men. On the other hand, 69 percent of the men, compared to 50 percent of the women, plan to invest in equities. High net worth men are also more likely than high net worth women to invest in alternatives, such as hedge funds, private equity and Real Estate Investment Trusts or REITs, 20 percent vs. 12 percent, respectively. International investments also attract more high net worth men than women, 41 percent vs. 21 percent, as do other real estate investments, 19 percent vs. 13 percent.
Less affluent men and women, which represent a much younger demographic, are more likely to agree on such questions as stocks vs. bonds. Mass Affluent investors with a net worth of $100,000 to $1 million - not including primary residence – report much narrower gender differences than millionaires, who are predominantly baby boomers and retirees.
Mass Affluent men and women share very similar attitudes towards investing in cash, and less than half of either gender plans to invest in cash products in 2012. They also share a similar attitude towards bonds and bond mutual funds, with roughly one-fourth of non-millionaire men and women reporting the likelihood to invest in such fixed income products. Attitudes towards alternative and international investments also appear to be very similar, attracting roughly 10 percent and 20 percent, respectively.
Non-millionaire men are slightly more likely than women, 39 percent vs. 30 percent, respectively to invest in stocks, while women are slightly more likely than men, 15 percent vs. 11 percent, respectively, to invest in real estate.