If men are from Mars and women are from Venus, you would have made more money last year investing on the red planet.

Since early last year, our firm has been following the investing sentiment of affluent men and women though the Spectrem Affluent Investor Index and its subset, the Spectrem Millionaire Index. We created these monthly indices because previously there was no consistent way to track these two groups, which are important not only to the financial services industry but also to the financial markets as a whole. Those with investable assets of greater than $500,000 control 87 percent of all investable assets in the United States. Their collective sentiment clearly has the power to move markets.

While the monthly index results told us a great deal during the course of 2004, when we sat down to look at our first year’s results—we began the indices with data collected in February 2004—we unearthed a fascinating phenomenon: Affluent men were six times more bullish than their female counterparts last year.



Looking at the results of the Affluent Index, which tracks the sentiment of individuals with assets of $500,000 and above, averaged for the 11 months we tracked, men exhibited a level of 17 while women totaled 3. Index levels of 11 to 30 are mildly bullish, while those between -10 and 10 are neutral. Thus, men were comfortably in mildly bullish territory during 2004, while women were investment neutral. (Click image to enlarge)

This says a great deal about the investment approaches of men and women, as both sexes lived through the same events in 2004. The headlines last year were dominated by the Iraq war, terrorism and the presidential election, all of which affected investment sentiment at particular times. For a while, as gasoline prices rose substantially with heightened tensions in Iraq, inflation became a concern as well. Through it all, men remained more bullish.

So which gender was on the mark? On its face, it seems that the mildly bullish men had the better instincts. The Dow Jones Industrial Average ended 2004 up a bit more than 3 percent—hardly a stunning performance and not decisive for the men or women in our analysis. However, if we look at Nasdaq, which was up more than 8 percent, and the S&P 500, which gained nearly 9 percent, the year looks decidedly bullish. Add the Russell 2000, up 18 percent, and the men win.

Defining Events
Does this mean affluent women should simply sit back and let men do the investing? Hardly. First, while the men were right in 2004, we cannot extrapolate this performance to 2005 and beyond. Some one-time events last year drove sentiment. Also, men were significantly more bullish than the average in 2004—and this might have led to some overzealousness. If anything, the results may argue for joint decision making in affluent households.

The year-end index findings support the results of a report we released in March 2004 examining affluent women and financial decision making. In it, we found that 75 percent of affluent men were willing to take calculated risks while investing, but just 60 percent of affluent women would do so. In terms of investment advice, 70 percent of the affluent women said they use professional advisors as their primary financial advisors. Only 62 percent of men said the same thing. Overall, women were simply more cautious.