Deborah Nixon Headshot

Women: Don't Leave Money Up To Men

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I was so impressed with Donna when I met her. An independent, boomer woman who raised two children on her own. Smart, organized and thoughtful. Yet, when Donna and I spoke about investing, she said the things that so many women have told me. "I would never have invested on my own. Absolutely not. I was scared, intimidated. I didn't feel I had that kind of brain -- the kind of brain for investing."

A significant 2008 study by researchers Tahira Hira and Cazilian Loibl confirmed that women lacked confidence in their investing ability. There are a number of reasons for women's lack of confidence. One finding by researchers Estes and Hosseini found that women have a need for clear and unambiguous feedback from the markets. This is a predicament for women as the stock market is ambiguous and inherently unpredictable. Time is also a big factor.

In an interesting chat I had with Kim Parlee, Vice President, TD Wealth Management, we agreed that a driving force is our lack of time -- women are still covering the second shift. We barely have time for our families so dealing with our investments never seems to be a priority. Kim talked about calling TD one night at midnight in order to discuss her investments. How crazy is that?

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We also talked about our hesitation in admitting to not knowing. As Kim said: "We are scared of asking dumb questions (and there are no dumb questions). Ask what you need to understand and keep on asking until you get the answer you want. And if you can't get the answer from that person, then find someone else. And if you don't know what you don't know, you start with that. What should I know?"

The fact that women who handle their own investing gain more confidence over time was evidenced by the fact that Donna was attending an investment education seminar. Somehow, Donna had overcome her obstacles -- the ones in her head. She had taken the first steps towards taking greater control over her money life. How did she do it?

Donna took baby steps. She decided to take a little bit of money and try her hand at investing. She made sure that this was money she was willing to lose. After all, with learning comes mistakes and Donna was willing to make some to learn. With each step, Donna gained a great deal of confidence.

TD's Women Investors research confirms this approach. The women surveyed did their research, and were never afraid to ask for help. They learn and grow as evidenced by the 76 per cent of women direct investors consider themselves to be highly successful investors. What is important to realize, as well, is that this isn't an all or nothing proposition. Many of the women who were direct investors also maintained a relationship with an advisor. You don't have to make an absolute choice to go it alone. In fact, Donna maintains a good part of her portfolio with her advisor, a person whose investing philosophy mirrors her own. As Rowena Chan, Vice President of TD Waterhouse states, "You are on a journey with your advisor because you are building trust. Sometimes, clients want to start with a part of their investments. You are able to test yourself through direct investing. So education is key. Remember, you're investing for yourself not by yourself."

So what's holding you back?

Pay attention to your disconnection from your money. The demographics suggest that you are likely to be on your own by the time you reach your mid-60s. Add to this, the almost 50 per cent of marriages which end in divorce and the average age of widowhood is 56. Women, you need to take control. You need to stop making excuses and begin taking charge. If you aren't prepared, you will be leaving yourselves vulnerable to those who may not have your best interests at heart.

So follow Donna's lead. Start small, educate yourself, ask lots of questions and get support. Taking the first step is tough but once you do it, the next steps are easier.