It was during my research for a story in The Globe's excellent - and very provocative - series on Women and Retirement that I stumbled on a statistic that really gave me pause.
In a poll conducted this summer by TD Waterhouse of women aged 45 to 64, 71 per cent said they don't have a financial plan. These aren't women in their 20s or 30s, just starting out in the work force or beginning their families. Many of these women are just years from retirement and they still had no plan.
The number astonished me when I first heard it, but by the time I finished my research for my story on the gender divide in investing, I was less surprised. What financial experts and academics told me over and over again was that women aren't being socialized properly about money. For many women, the experts say, investing for retirement doesn't begin to be a priority until it is forced. In other words, many women don't pay attention to investing until they divorce or their spouse dies. Only then do they begin putting together a financial plan.
"They get involved when some very drastic change happens in their lives," said Tahira Hira, a professor at Iowa State University who co-authored a 2007 study on gender differences in investing.
Prof. Hira said she sees that in every survey she does on the subject, and anecdotally as well. When she speaks to female financial planners and personal finance writers, for example, "they often learned because they had no choice, they needed to learn. They had to face adversity. And once they did, they needed to tell other people."
Patricia Lovett-Reid would agree with that assessment. The senior vice-president of TD Waterhouse cites a recent report done in the U.S. by the NASD Investor Education Foundation that shows women just don't get involved in longer-term financial decisions. But that doesn't mean women aren't involved in handling money. Far from it. They often run the household financially, making the day-to-day money decisions.
"My rallying cry to women continues to be: You have got to get involved. Don't wait for a life event. That may be the exact wrong time in your life emotionally to take on investment management."
But the news is not all bad. As Prof. Hira said, when women do get involved in investing, they tend to do well. That, too, is because of socialization, she believes. "They recognize what they don't know and they set out to learn and they learn carefully and act cautiously," she said.
In fact, study after study show that women fare better than men in investing, mostly because men tend to buy and sell more than women do, and pay the price in trading fees. The same is true for all-women investing clubs - a 1998 National Association of Investors Corp. survey of its 37,000 member clubs found that clubs that were all women had an average return of 23.8 percent a year, compared with 19.2 percent for clubs that were all men.
These kind of results aren't meant to convey a silly, women-aren't-we-better-than-men? message. Instead, they show that women, once they get over their reticence, can and do succeed in investing.
The first step? Do some reading, get some advice and map out a financial plan.