Personally, I'm not really for roboadvisors taking pot shots at each other because marketing professionals need to be hired to do this, and this inflates the expenses of a roboadvisor and its ultimately the consumer that pays for the entertainment.
I am also sensitive that investment trainers do not do the same. Singapore dividends investing is riding high at the moment after perhaps a decade of trailing behind US Tech investors and Crypto bros. In another economic regime, we would not be doing that well, trends come and go. If trainers start tracking their portfolios and trigger a wave a comparisons, it would invite reprisal when the economic fortunes begin to shift. I think it's a lot easier to focus on personal charisma and refining a philosophy to pick students who are more aligned with your style. That being said, because two decades ago, I got challenged by an insurance agent to compare investment returns, so I have have my performance tracked on Stocks Cafe, just in case some investment pugilist wants to come knock on my door.
In the end, I did throw my hat in the ring. I suggested a simple duel. The warring robo-advisors should always be ready to publish returns net of fees, standard deviation, and Sharpe ratios for three years ending say, 1 June 2022. A higher Sharpe or Sortino ratio should adequately divide the boys from the men. Interestingly, once these marketing guys see a genuine attempt at resolving the issue of whose dick is longer, they disappear from the forums.
Comparing dicks is of course, what some companies might want to get out of business of doing.
Yesterday, I was also invited by Stashaway to attend to discussion the gender gap when it comes to investing and went out of sheer curiosity because I cannot imagine why someone would be crazy enough to invite me, a BBFA spokesman and Senator of Singapore Incels, to discuss why women are not investing sufficiently in the equity markets. So I had to go to at least find out how I got selected.
I was pleasantly surprised and flattered to hear that I'm one of the OGs of financial blogging. For a blog that earns just $150 every 4 months, that was very flattering.
The research presented was not novel, as Stashaway is heavily regulated by MAS. I expect them to present the results on the web soon, I added some points which probably cannot be shared by on their platform, instead I just want to put on this blog what I think about gender differences in investing :
a) Males invest more aggressively because, unlike women, we males are ranked and yanked based on economic resourcefulness. So long as women prefer more successful and wealthier men, men will not only be aggressive with investing, they will take more risk than it is mathematically rational to do so. This is why men buy more crypto, and women buy more cosmetics. It's evolutionary psychology.
b) Simply showing what women are leaving on the table when they lower their asset allocation to equities is not enough to get more women into investing. I bluntly told Stashaway to invite a lady divorce lawyer to share her experience on the latest case law. She can speak credibly about division of matrimonial assets and in which cases wives actually end up giving husbands maintenance. Fear is a much more powerful motivator.
c) My favorite narrative is that, in modern societies, guys are not reliable anymore. Males not just lose important earning years doing NS, we are slowly losing out academically to women. While guys dominate the STEM disciplines, there are guys who can't operate a spreadsheet. Even if the strongest case where a women finds a local male grad in the tech field, it'll be heroic for him to take on 70% of the economic workload. Women can look into societies like Afro Americans in the US where black males face large unusually high incarceration rates and see how much these Black women are studying hard and empowering themselves.
d) In my possibly archaic view, men will never be an "Ally" of women. I'm a provider to the women of my family, and I am concerned about the welfare of my daughter when odds are my son in law will suck and unable to support her 100% (won't even be his fault). When you say Ally of women, I imagine some effete BTS team member who wears makeup and support equality so long as they sell more music records. Gen X men are grudgingly partners, but only because we're not good at making money anymore to feed the whole family. I think a lot of old school guys want to provide for the whole family but they can't.
e) Ideally, guys needs to be kicked out of the discussion room for now. Upon reflection, it does not come as surprise or irony that most of the folks discussing the research finding in room are the dudes and I contributed quite a fair of that yesterday. I feel genuinely bad about the whole encounter now. There were two journalists in the room, and they were so quiet I though I was in a speed dating situation organized by the SDU in the 2000s. Initially, I'm not a big fan of women's only events because of my firm belief that stocks don't check your gender before they send dividends in your bank account, but giving up some space so that women feel more comfortable about speaking up is really important for now.
Anyway, this is just a glimpse of my personal encounters yesterday, I think we should give Stashaway a chance present their findings and pivot to an important demographic. And do give their fund performance some slack - sometimes you win, sometimes you lose. Over the super long term, the gap will not be too different for portfolios with the same asset allocation.
You want to sell something to women, put a Hello Kitty or LV logo on it. Problem solved.
ReplyDeleteIf a Woman's goal is to find a rich, handsome husband who showers her with gifts and is the envy of all her friends....its hard to see how investing helps.
Maybe relate it to the nurturing, caring side of things...."Spend time with your children with all your passive income...."
Stashaway was instrumental in kick-starting my attempts at investing because it required only $50 to start and I didn't need to know how to stock pick. It was the easiest thing to start, for someone who was clueless and not the best with numbers. Eventually, as I learnt more about personal finance, I became more excited about buying a new bond/ETF/UT than a new handbag/dress. It's still shopping 😹
ReplyDeleteI feel that the gender gap in investment could be due to:
1) The lack of exposure - women don't talk about investing to each other enough (I only know two female financial bloggers "Lady You can Be Free" and Jeraldine Phneah).
2) Dearth of investor education targeted specifically for women. I think the context is very important, such as addressing how investing is important in different stages in our lifetime, such as singlehood, motherhood, retirement etc. Simplifying the financial jargon would help as well. Making the content relatable to women - I was happy when Jeraldine Phneah wrote about why she chose to invest in Lululemon - now that's a company I know! There is a huge market here! The New Savvy is one app that has female centric investment information, as far as I know.
3) Perhaps the demands of juggling work and family could also prevent women from learning about and spending their time investing?
4) Women tend to have lower risk appetite than men (my assumption here), so we tend to hesitate starting to invest, even though we understand the concept of compounding etc.
5) We need a safe space to ask all the dumbest questions about investing, so I agree with your point (e).
ReplyDeleteIn my parent's generation, men were seen as the providers and so took care of the family's finances. Sadly, even with younger couples today, this out-moded thinking and practice still persists though.
ReplyDeleteI am in my 50s, and importantly single, so have had to learn the investment ropes to take care of my own finances. It has taken a lot of time and effort to research and read up on things, however after 5 or so years I now have a very very good portfolio and passive income stream.
My married women friends my age however, are too busy tending to their families and have not much interest in financial matters (nor politics nor world affairs..).
My single women friends who are investmenting though - they are keenly aware they have to take care of themselves afterall (necessity is the mother ...).
Interestingly, my women friends whose marriages after 20+ years have hit the skids have also belatedly shown more interest in CPF and finances. I wish they had realised the importance of this much earlier, and not be forced into this situation only when they hit their 40s and 50s. But better late than never.
So what can be done to interest / force more women to take an interest in their finances? Positive stories about women doing financially well on their own managing their finances, as well as scare stories about women who've belatedly realised they can't rely on their husbands forever.
Also, keep it simple, and keep the jargon to a minimum, and provide some hand-holding. Have polished and articulate women spokespersons - women might respond better (from an identity standpoint, and also because men addressing a women-specific audience might come across as man-splaining). The educated women can obviously handle finance topics, I think it's more a matter of packaging the info to appeal to a different demographic. And for heaven's sake I'm not talking about wrapping it in pink or inserting Hello Kitty (cue eye roll ..).
Totally agree with you, I'm single too, hence financial independence is top priority for me.
DeletePoint a: it's the testosterone too. There are studies that observe the correlation. It has an evolutionary basis; risk taking for outsized rewards, which lead to greater resources and status, which then translate to greater mating opportunities. Then the male descendants tend to inherit these traits too.
ReplyDelete