Women make gains in financial literacy; men experience ‘testosterone overload’

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Posted: Sunday, July 21, 2013 12:00 am

Women still lag men in overall financial literacy, but women have been making some gains because men tend to “backslide” and take improper risks when the stock market is advancing, a new study said.

Financial Finesse, a company from El Segundo, Calif., that offers workplace financial wellness advice, said men outperform women in almost all sorts of financial matters except for managing college expenses and saving for retirement, where women outperform men.

The gap has narrowed somewhat over the four years the study has been conducted, a period when the stock market has been gaining ground.

The company surveyed people during the first quarter of 2013.

“Women actually improve their investing habits and behaviors in a strong market,” a report on the survey said, “while men backslide and begin to ignore the risk management controls they originally put in place to create proper diversification and oversight of their portfolios.”

The report said recent neurological studies showed that men were more likely to experience what researchers have called “testosterone overload” after stock market gains, taking progressively more risks “until they eventually experienced devastating losses.”

In contrast, the report said, women were more likely to become more diligent during a winning streak and take steps to protect their gains.

Yet except for college spending and the percentage of women taking part in company-sponsored investment plans, women in the survey scored lower in most types of financial planning. That included handling monthly cash flow, paying bills on time, learning about investments, tax planning, insurance and retirement.

For women, the report said, financial understanding is especially important because they tend to live longer than men, often in households with lower income.

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