February 13, 2008: Men and Women invest differently and each needs to work with a financial planner to counter their investment biases.

How do men and women invest differently? It's an important question for investors to consider when implementing their financial plan.

In fact, many people do follow the stereotype, whether in Arizona or across the country: men invest aggressively, while women invest more conservatively. This results in very different investing behavior and very different needs between you and your financial planner or investment advisor.

For men, this means they usually prefer a larger portion of their asset allocation weighted toward aggressive investments such as growth stocks, small-cap stocks, and international. This is neither good nor bad, it depends on your risk tolerance and financial goals. However, men do have one investing trait that is a definite negative! They trade too frequently! Trading has been shown to be harmful to investment performance, due both to the trading commissions and the underperformance of the investments bought. This fact has been shown in every study, both from individuals and from professional money managers. The more often you trade, the lower average return you will have. What to do? Men in Arizona should work with their financial planner or investment advisor to make sure their financial plan has some conservative investments in it, in order to cut down on volatility and their impulse to trade. Secondly, don't change your investment plan unless there is a change in your financial situation.

For women in Arizona, their conservative tendency means their investment advisor or financial planner should show them the benefit of including some more aggressive investments in their portfolio. This means accepting a little more short-term volatility, but you get a higher long-term return which is especially important for women, who have a longer life expectancy and need their money to last longer.

The bottom line for your financial plan is that everyone should have a portfolio with a mix of investments that will meet their financial goals.