Women tackle more financial decisions

Data from the Securities Industry Association shows that women control or influence 80 percent of all shopping decisions, and they also influence 53 percent of investment decisions.

In addition, they also own more than 8.5 million businesses in the United States.

A 2004–05 survey by Prudential Financial indicated that nine out of 10 women have sole or joint responsibility for managing their household’s financial well-being.

Women, as a group, comprise a formidable investing presence, and while many of the basic rules of investing hold true for all investors, some life events will affect women differently than men. These life events also can impact investment decisions, and they call for special consideration by women investors.

• Life expectancy. People in general are living longer now, and conventional wisdom says that women tend to outlive men, an idea that has been confirmed by various studies. The National Center for Health Statistics said in 2000 that women outlive men by an average of seven years. Women often end up facing more years in retirement. To be prepared, women need to take special care to implement strategies that cater to their long-term needs.

• Flying solo. Studies also show that women have a very high probability of being on their own at some point in their financial lives, either as the result of a spouse’s death, a divorce or the choice to remain single. Dropping from two incomes to one would require making adjustments, so it’s important to think about alternatives and options for this scenario.

• Time away from work. When caring for children, or even an elderly parent, women tend to spend more time away from work than men. Some surveys have shown that, on average, women spend more than a decade out of the work force. The implications for women in regard to investments are clear: They will have less time than their male counterparts to contribute to their retirement nest eggs.

These are just some of the important issues women investors need to consider. There are, however, additional steps that can be taken to create an effective financial strategy.

For starters, investors – women and men – should look for ways to educate themselves about investments. Financial publications and Web sites are loaded with information about investments and options. It is important to remember that not every source is the most reliable, but there is plenty of information out there.

It also might be a good idea to seek advice from a professional. The act of enlisting a financial consultant to help with investments does not take away the ability of the investor to make the final decisions. Professional help does, however, provide someone to turn to for guidance as those decisions are made.

One of the most important steps is to make a list of financial goals and develop strategies to meet them. Taking the time to assess their current financial situations can help investors get a clear picture of where they stand and envision where they’d like to go.

Keeping in mind the special circumstances that have been addressed, women investors can chart a course of action that will enable them to meet future challenges.

Timothy M. Reese is senior vice president-investments with A.G. Edwards & Sons Inc. Member SIPC. He can be reached at timothy.reese@agedwards.com.[[In-content Ad]]