Men and women are different when it comes to money. Not the most outrageous statement. It's something financial advisers who sit across the desk from the sexes on a daily basis have no problem telling you.

What are the differences? If you want to make it simple, women are about security and men are about freedom. That's what money generally means to each. How does that work for them when investing?

A study earlier this year by a US-based investment app, found that it works better for the women. The app had quite a hefty data set to work with. A total of 640,000 investors responded to their survey, two-thirds men and one-third women. Here 90 per cent of women suggested they had a low or medium risk tolerance as opposed to 75 per cent of men, but around 50 per cent of women invested in high risk assets – the same figure as men.

The most interesting part of this app's report was their user behaviour during the market correction earlier in the year.


The app examined user behaviour on two particularly volatile days for markets in 2018 — February 5 and 8 — when indexes such as the S&P 500 suffered big losses, moving into correction territory. It turns out women acted more rationally on turbulent days. When the team dug into the numbers, they discovered that it was male users who panicked.

Men were 87 per cent more likely than women, on average, to sell an investment. And that behaviour continued into the following week, with male users still being 76 per cent more likely than women to sell an investment, compared to female users. By selling after a market drop, men effectively locked in their losses.

Whatever the men thought they could achieve isn't clear. And maybe not all of them were panicked at all. That's just the overall conclusion we came to, along with many others who've reported their findings. Many investors do want to protect themselves from further falls. Recency bias says they're believing what's just happened will continue.

Maybe it wasn't panic they were experiencing.

There is a good possibility they were playing that even more irrational game of thinking they could time the market. Assuming the falls were the beginning of something bigger and that they could get back in at a lower price. Problem with that, even with the most recent correction, the low for the year is still February 8. Anyone thinking they could outguess the market and find a cheaper entry point never found it.

It's only a suspicion, but the men's behaviour likely had something to do with the number of times they checked in on their investment. If an investor is in an emotional state of mind and can press some buttons thinking it will make them feel better, they probably will.

Pressing buttons and checking in is not the goal.

So how can you resist the urge? We've had great feedback on the recent market volatility. One of our associates talked to an investor who couldn't help himself but check his investments on a regular basis. He wasn't planning to do anything, but just the process of logging in and looking at the market movements was affecting him.


There's no doubt if an investor is checking in on their portfolio every day the significance of any market movements will be magnified in their mind. Worse, if they've got the ability to make changes, they're more likely to do so.

Women seem to already know this, so we'll leave the final message for the men.

If you're a long-term investor, it's important to put random days or weeks in context. In 10 years' time do you really think the 8th of February 2018 will matter?

• Nick Stewart is the CEO and an Authorised Financial Adviser at Stewart Group – a Hawke's Bay-based independent financial advisory firm based in Hastings. Stewart Group works with individuals, families, and businesses in New Zealand who are committed to pursuing financial planning and wellbeing. Our clients understand the value of independent, goal oriented and objective financial advice that is free of conflicts. If that sounds like you, we would love to hear from you.

• The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961.