Would men and women manage a windfall differently?

Our study explores how each gender would advise handling investing a sudden big financial gain

Morningstar 21 June, 2019 | 1:21AM

Couple on a cliff

Financial-behavior studies frequently suggest a difference between the behavior of women versus men. For example, studies like Odean’s and Barber’s “Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment” found that men’s tendency toward overconfidence bias prompts them to trade more excessively than women, resulting in lost returns. On the other hand, studiesconcerning women’s financial behavior often find that women tend to be more risk-averse and take on more conservative investments, sometimes to their own detriment. 

Our research suggests that these faux pas in financial behavior are not a result of lack of knowledge. Rather, many studies have found that investors tend to make the biggest financial mistakes in situations where emotions are running high. But in a low-pressure scenario, both men and women choose fairly optimal investing decisions. 

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