Investing As A Couple Can Lead to Marriage Stress

By
Services for Real Estate Pros with Think Glink Media

Retirement fund expert and Equifax Personal Finance Blogger Dan Solin offers an provocative new insight in his latest blog: investing with your significant other can ruin the relationship.

Dan writes: "Many couples believe in togetherness, which can be a good thing. However, there are dangers to investing jointly that should give even the closest duos pause.

Remember the best-selling book Men Are from Mars, Women Are from Venus, by John Gray? The difference in the way men and women view the world has particular applicability to investing.

As many women know, men generally don’t lack confidence. They typically love the “action” of buying and selling stocks. The fact that trading increases costs, which decreases returns, doesn’t dent their enthusiasm for risk taking. I’ve found that male investors tend to seek the “big score,” often unaware of the “big risk” of losing a significant part of their invested capital.

Many women have told me that they find the markets pretty intimidating. Many men don’t admit their fear. They believe they can handle it.

A lot of men consider themselves to be very knowledgeable investors. Women tend to have a different view of their investing knowledge. A 2009 survey found that 73 percent of men professed having “a general knowledge of stocks, bonds, and mutual funds,” compared to only 40 percent of women.

Given these vast differences in attitudes, you have to question the wisdom of men and women investing jointly.

Women should be especially wary of deferring to their spouse. According to Bloomberg.com, a Merrill Lynch survey polled 1,000 people in 2005 to determine if men or women were better investors. The study found women made fewer mistakes, were less likely to become emotionally attached to losing investments, and engaged in fewer transactions than men. A study in the United Kingdom reached a similar conclusion. It looked at 100,000 portfolios. Those managed by women significantly outperformed those managed by men."

The full blog has even more interesting information. Check it out here: http://retirement.equifax.com/2010/09/investing-as-couple.html

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Rainmaker
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Jeremy K. Frost
Keller Williams Realty

Interesting post. Thanks for sharing this with us!

September 07, 2010 04:46 PM
Rainmaker
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Mike Wong
Realtor, GRI, Project Manager
Keller Williams Realty Southwest

Very interesting. Im an investor myself and I make alot of risky plays in the stock market and in real estate investments. Im a single guy, so my decisions for now only affect myself. But I do realize sometimes I get tunnel vision and lose perspective of the risks, and I call in a female opinion who is also one of my working partners.

September 07, 2010 05:10 PM
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Ilyce Glink
Best-selling author, award-winning TV/radio host.
Think Glink Media

@Jeremy - Thanks for reading! There's another post you might like to read on the Equifax Personal Finance Blog about the tax repercussions of divorce.

 

@Mike - Thanks for your comment. Men and Women can have very difference viewpoints, and it can be valuable to consult someone else when making a decision -- even as a single guy!

September 09, 2010 03:46 PM
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Ilyce Glink

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