Survey Finds Women Lack Confidence in Purchasing Stocks

Butterflies in the stomach are common the minute anyone has to sign on the dotted line and face a future of monthly mortgage payments and household bills. But women appear far more confident buying a home--often valued at hundreds of thousands of dollars--than they are buying stocks or bonds, which are often valued at far less.

Women appear to be more confident coping with traditional financial transactions such as negotiating for a home or buying insurance. But when it comes to tackling investment transactions like the purchase of stocks or certificates of deposit, forget it.

According to a survey by Self magazine, only 19% of women said they were confident buying stocks, CDs and bonds. The magazine reported 26% said they lacked confidence.

But when it came to a home, plunking down thousands and committing to a 30-year mortgage, 36% said they were confident. And 34% said they were confident about buying insurance.

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For many women, making major purchases and managing money are becoming a regular part of life. While women are more confident buying durable goods, a lot of this confidence comes from research. Nearly 60% of women said they “never buy an expensive product without asking other people about the product, reading up on it or getting information from the manufacturer.”

Experts who track consumer attitudes say that women, despite ever-evolving attitudes, education and training, still generally have major problems when dealing with the purchase of “intangibles,” such as stocks, bonds or mutual funds.

Tangibles are what you can see and feel, such as a house, car or other big-ticket item.

One reason for this problem with intangibles is that women have generally not been raised to take care of financial needs, said Judith Langer of Langer Associates, a trend consulting firm.

“Women are more risk averse,” she said. “How deep this goes into our psychology, no one knows.”

She said that “women have been trained somehow to play it safe, to take care of what we have. Women think they need a lot of money to get started,” Langer said, which shows a lack of understanding of money matters.

In addition, the women, with whom Langer spoke in focus groups related to the Self study, said they expected sales personnel to treat them poorly, as if they were not uneducated, but unintelligent. This, especially when dealing with intangibles, made major purchases difficult.

But Barton Weitz of the University of Florida says a lack of confidence buying intangibles does not apply just to women.

“In general, it’s not an issue totally related to women. Both (genders) have less confidence evaluating intangible objects,” he said.

However, Weitz, chairman of the marketing department at the Gainesville, Fla., campus, said women may be “more unfamiliar with making these types of decisions--a lack of experience.” But he expects this to change over time.

Education is the key to increasing women’s confidence in making “left brain”--artistic or creative--decisions, experts agree.

“There’s no question that once someone has knowledge, confidence rises and they will take a risk,” said Frank Viggiano, professor in the department of consumer affairs, human development and environmental studies at Indiana University of Pennsylvania.

But without knowledge, women will postpone the purchase or buy something they know they can return.

“We can do all the ads you want, be visible, gain attention . . . but if there’s no knowledge, (women) will postpone a purchase or will buy and return it--just to acquire it and then do research after. Then they say, ‘Oh my goodness, I didn’t buy the right thing.’ ”

Pick up a financial magazine, or ask advice of someone you respect, Viggiano suggests.

“Get the vocabulary together and after you feel competent, wander into a store and ask questions . . . ask around, read more.”

He also suggests that women analyze what their personal needs are and list the benefits and features of a particular item, tangible or intangible.

At the root of problems with major purchases, Viggiano said, is that “we talk about consumerism, but we don’t teach it. We’re bombarded with ads but not with educational material,” he said.

This is particularly problematic for women, who according to his research feel they need to know twice what men feel they need to know in order to make a satisfactory purchase.

While Langer found that there were few generational differences among women and their attitudes toward major purchases, she did find that women in their 20s and 30s had more financial training in school.

“Some were every bit as savvy as men, but were a very distinct minority,” she said.

While Langer agreed that women’s attitudes are changing, “We have a problem of playing catch-up,” she said.

According to the Self survey of 1,376 women 18 to 49, conducted by Willard and Shullman Inc., 89% of the women personally own car insurance, 81% have savings accounts and 77% have life insurance.

But only 5% personally own Treasury bills, 37% have stocks and 31% have a mutual fund.