"When you talk to women, the majority of them are long term investors, not "traders," says BMO InvestorLine
president and  CEO
Connie Stefankiewicz 

Women bring their own perspectives to investing, especially online
by Jana Schilder

At BMO InvestorLine, president and CEO Connie Stefankiewicz reports that 40% of new accounts are now opened by women; that’s up from 30% just a few years ago. “Over the past five years, BMO InvestorLine has seen a 113% increase in women investors as more women are going the do-it-yourself route,” she says.

Is BMO targeting women specifically? “Yes, we are. At BMO InvestorLine, we’re focusing on long-term online investors. When you talk to women, the majority of them are long-term investors, not traders,” says Stefankiewicz.  

Behavioural finance
Terry Odean and Brad M. Barber are two professors at the University of California at Davis, who have been studying “behavioural finance”—the psychology of investing—since the early 1990s.

Odean, speaking at a Morningstar Research, Inc., conference in June 2008, reiterated his findings that men tend to be sure of their ability to make good investment decisions, while women are far more cautious. A tendency toward overconfidence can lead to excessive trading, borne out by the Odean-Barber research: their data indicated that men traded 45% more actively than women, and single men traded 67% more actively than single women.

Investment performance, however, favored women. “Overactive” trading reduced the men’s net returns by 2.65 percentage points a year, compared with 1.72 percentage points for women. The reduced return came from the increased expense of extra trades, plus the fact that newly purchased securities did not outperform those that were sold.

“Women need the confidence and the research to make more informed decisions. And that’s what we’re trying to offer women at BMO InvestorLine,” says Stefankiewicz.

"Stocks in the City"
To this end, BMO has two initiatives targeting women. “Stocks in the City”—a homage to Carrie Bradshaw and her TV gal pals—is a series of educational investment seminars BMO InvestorLine launched in July 2008. To-date, BMO InvestorLine has hosted women’s seminars in Vancouver, Kitchener, and Toronto; another event is planned for Ottawa in January 2010.

“In Toronto, the event was held at the National Club. They were standing 3-deep at the back of the room and the line snaked out the door,” says Stefankiewicz.

From researching potential investments to researching killer-heel pumps, women like to comparison shop before they buy, explains Stefankiewicz. To this end, BMO did a deal with Sweetspot.ca, a women’s lifestyle website, in August 2009.

Cost-per-Wear calculator
“Our Cost-per-Wear calculator is a way to help women connect shopping and investing. And if they get control of their spending habits, they can also control their investing,” says Stefankiewicz. It has been a popular application and can be downloaded to a BlackBerry by typing www.sweetspot.ca/cpw into the mobile browser.  

So, with the Cost-per-Wear calculator, those Manolo Blahnik’s or Jimmy Choo’s can move from the “outrageous” to the “sensible investment” category after all, depending on the number of times those shoes will be worn.  

While women investors outperform men investors, there is also evidence that women online traders outperform men online traders, too. Larry Pesavento, an online commodities trader for more than 50 years and originally trained by Drexel Burnham Lambert in Beverly Hills, California, has also taught more than 1,000 men and women how to be purely technical traders.

Pesavento says the perfect person to teach online trading to is—wait for it—the housewife. Why?

"Empty vessel" is a compliment
“Because housewives are ‘empty vessels’—in the most positive sense—They are willing to learn and they don’t have any preconceived ideas about online trading,” says Pesavento. He knows a fair number of housewives who trade online and make between $1,000 and $2,000 per week.

Gee, if the housewives of Wisteria Lane really got focused enough, perhaps “Desperate Housewives” would also air on BNN?

“Women seek education earlier in the learning process. The main difference that we see is that women have far less ego than men—and as a result, they are better online traders,” says Ron De Appolonia, general manager of the Toronto office of the Online Trading Academy.