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ARCHIVE FOR RECENT MEDIA COMMENTS, ARTICLES, AND NEWSLETTERS
Recent Article Links featuring comments from Sheryl Sutherland
Safe
as houses
By Amanda Morrall | The Press
|Thursday, 14 June 2010
Save
now for future education
By Amanda Morrall | The Press
|Thursday, 11 February 2010
A
costly wee bundle of joy
By Amanda Morrall | The Press
|Thursday, 12 November 2009
Ten
top tips for your 30's
By Allison Tait | MSN NZ MONEY
|Tuesday, 10 June 2008
Ten
top tips for your 20's
By Allison Tait |
MSN NZ MONEY
| Monday, 6 June 2008
Dealing
with financial grief
By Rob Stock | Sunday, 25 May 2008
Save
it for Later
By Joanne Black - New Zealand Listener |November 17-23 2007 Vol 211 No 3523
How
to rewire your brain to make money
By Rob Stock |Sunday Star Times | Sunday, 22 July 2007
Wary
women worth their weight in gold
By John McCrone |
The Press |
2 August 2006
Women are from Venus and men are from Mars, apparently. So how does this planetary misalignment work out when it comes to investing money? John McCrone reports.
When a man gets lost driving, they say he will blunder on rather than stop to ask directions. Women will pull over and admit they need help. Some believe exactly the same is true of male and female investors. Men hate to ask the beginner's questions that would reveal they are not financial experts, while women may be under-confident, yet more likely to ask for, and act on, sound advice. Well, is there good evidence for this supposed male-female divide?
It is a difficult question, but
an important one, according to investment professionals such as Christchurch's
Sheryl Sutherland, author of Girls Just Want to Have Fund$, and Kim Kiyosaki,
US author of Rich Woman – Because I Hate Being Told What To Do!. Ms
Kiyosaki says a few statistics show why women need to take charge of their
financial affairs. In the United States, 47 per cent of women over 50 are
single or divorced. Even if married, women are likely to outlive their husbands
by about a decade. And of the elderly living in poverty, three out of four
are women. Ms Kiyosaki says women may now be in the workplace earning good
salaries, but too many still feel intimidated by the maths and jargon of high
finance. As a result, they are failing to take the next step and invest that
money. Ms Sutherland points out that if women do have a different decision
process, then it would be dangerous to force a generally male investment style
on them. They could easily end up in the wrong investments. Ms Sutherland,
who has been a financial planner since 1981 and founded Women's Financial
Strategies to focus on female clients, says she definitely sees truth in the
stereotypes. Men and women may well end up making similar decisions –
after all, a good investment is a good investment – but they do it differently.
Women often paint themselves as less confident, perhaps because of a maths
anxiety or the idea that investing is difficult. Yet really it is only a fear
of the unfamiliar Ms Sutherland says. "You get the half nervous, half
embarrassed laugh and they say: `Oh, I'm no good with money, I don't understand
it.'
"But I don't know any woman who isn't good with money. They can budget,
they can shop at sales, they understand the value of a dollar. And if you're
going to invest, all you really need to understand is the value of a dollar,
and that's it," Ms Sutherland says. Women also seem to wake up to the
need to invest later in life. "Forty is the age of reason for women.
It is when you lift your head up and think: `Oh my God, the kids are getting
older and have I organised my retirement yet?'
"You get the major life crises like divorce, illness in the family, or the realisation that the cloud of dust on the horizon was the white knight charging by rather than stopping to pick you up." Surveys then show that once they start to invest, women take much more time researching and are more disciplined in sticking to a plan, so tend to make fewer mistakes. They also have a lower tolerance for risk, they prefer to be ethical investors, and they are more likely to "nurture" an investment.
One study by University of California at Berkeley researcher Terrance Odean found that women beat men in the stockmarket simply because they were less likely to chop and change. Frequent trading is a fast way to lose money because when most people try to cash in on their gains, they end up swapping their best performing stocks for weaker ones. So women made a significant gain just by keeping their portfolio turnover down to 53 per cent each year compared to 77 per cent for men. Ms Sutherland said women needed more time to make their decisions. "You've got to be patient. With a guy you could probably turn around a financial plan within a month to six weeks. But often with a women it will take three months because she will go off and consult all her friends and her relations."
Others echo the view that women prefer to take their time, gather the information, then stick with their decisions. Carmel Fisher who founded the Auckland boutique fund manager, Fisher Funds, says it is likely to take five conversations rather than just two to sell a product to women. And they are less likely to go for new company floats, the latest stockmarket fads, and other more risky gambles. Alexandra Dalzell of Christchurch stockbroker Greenslades says women clients are more wary of losing money and also want to feel philosophically in tune with the companies they invest in. If they have had a bad experience as a customer, they are more likely to avoid even a "good buy" than a man. They also tend to be ethical investors, avoiding firms involved in tobacco or gambling, and favouring those with a community or ecological benefit. Ms Dalzell says the female keenness for research shows in the fact it is mostly women who form share clubs. Ms Kiyosaki says women are always prepared to shop around and seek consensus so are less prone to being rash.
One surprise, given the widely agreed upon differences in female investment psychology is the apparent lack of financial products and services that seem specifically targeted at women. Go into any toy shop and it is clear that pink is for girls. There are chick flicks and chick cars. But is the finance industry still too testosterone-driven to have focused on female customers? This may be changing. Last November, British "superwoman" fund manager Nicola Horlick launched Bramdiva, a female-friendly managed fund for self-made women. Ms Horlick says in Britain, women already own 48 per cent of the nation's personal wealth and this is predicted to rise to 60 per cent by 2025. Her chocolate and pink website shows very clearly how the image of the industry may change once more firms rethink their marketing.
One New Zealand product that some have mistaken for being tailored to women is Liontamer, a "capital protected" set of funds investing in riskier markets like China. Liontamer was set up by four women. And the locking in of the initial stake might be thought to be especially designed for risk-adverse female investors. However, managing director Laetitia Peterson says the aim was to appeal to conservative investors generally, such as those with less spare cash to play with or closer to retirement age. And Liontamer seems a fairly masculine name. So nothing girly there. But she admits that perhaps the fact that four women came together with a very similar investment philosophy, one hoping to mix growth with safety, may unwittingly be an example of a more feminine approach.
Of course, as Ms Sutherland points
out, the gender difference is more about finding the right decision process
than about creating woman specific products. WOMEN clients often say that
they feel rushed into things by male advisers. There is too much market jargon
and focus on technicalities. Ms Sutherland says women need a more holistic
approach. They want help with soft skills, such as how tactfully to raise
investment issues with their partners.
She says that when they meet a financial planner, most women will come across
as more cautious than they really are. "One of my pet peeves is that
if you do a risk profile for a woman who hasn't done any study or any reading,
she'll come out as conservative or balanced. Most advisers will then say right,
let's bung her into something like that. "Whereas what the client needs
is education as to the cost of pursuing a very low risk investment."
Women normally spend many years out of the work force caring for children or aging parents. Or their earnings may be reduced by working part time. Given they will also likely live longer, Ms Sutherland says most women in fact usually need to be steered toward taking more risks than men in their investing, going for a greater proportion of equities in their portfolios. Ms Sutherland is still a rarity in the investment industry. More women are becoming financial planners all the time, but most would agree that the business still has a marked male flavour. Ms Kiyosaki suggests it is probably just a matter of cultural changes still working through the system. Women have made great strides in the workplace in the past 30 years. But it is only recently that they have moved from being serious earners to serious investors for their futures. But Ms Kiyosaki feels the picture might be different in another 10 years.
A wealth
of tips for women
By Allan Wood |
The Dominion Post |
4 October 2005
Packaging financial advice for women has paid off for Sheryl Sutherland. The consultant-cum-seminar speaker has now published a book, Girls just want to have FUND$, in which she summarises the advice she gives to her clients. Alan Wood reports.
An ever-widening network of women is zooming in on writer Sheryl Sutherland's wealth-creating tips. Ms Sutherland started flying solo in financial planning in a thoroughly male-dominated world.
But from being the sole woman at planners' conferences she has taken her understanding of women and money to become an advocate for a financial plan for life – an approach outlined in her book Girls just want to have FUND$.
"When I started working in financial strategy, it was considered to be a little odd – there weren't other women in the field," she says. "I used to stick out like a sore thumb in the conventions and seminars."
Only in the past decade have women
made great inroads into the profession. "Which is surprising because
this business is all about relationships, it is all about understanding and
empathising with people, and (that is what) women do best."
Though she may not be part of an old girls' network in Christchurch, Ms Sutherland
certainly is part of a New Zealand-wide one that is now stretching overseas.
Her book, launched last week, has already drawn requests from a cross-section
of women's groups for her to appear as guest speaker. These include the women's
branch of the Institute of Chartered Accountants of New Zealand, the Canterbury
Women's Legal Association and educationists.
"It's obviously appealing to networks-type people," she says. "The
Women's Resource Centres also want a chat."
Ms Sutherland's flirtatious title
(more seriously subtitled Every Woman's Guide to Financial Independence) is
something women having fun in the mid-80s will identify with. Cyndi Lauper's
song was a starter to many a night out and encapsulated the girl-power attitude
of that decade. "I think the title is great. Of course (Cyndi) was (an
inspiration), I just love her music and how hard was it to put a `D' and a
$ sign on the end?" she says. "You don't have fun if you don't have
funds." The publisher added a Thelma and Louise-inspired cover photo
of two women doing a high five from the front seat of a convertible –
but with the beach instead of a cliff-face towering up before them.
Women's choices have broadened, Ms Sutherland says. The subject of women and
money was the basis of her thesis, which examined the role of women in the
economy during the 19th century. The book concentrates on the basics of financial
empowerment, tackling issues such as women's fear of money or cultural imprinting
that may result in a wealthy woman with millions of dollars stashed in cash
– her "bag lady" syndrome, an example taken from an Oprah
interview.
The book sums up Ms Sutherland's career to date – and includes some
of the material presented in seminars she has been giving since earning degrees
at the University of Otago and University of Waikato, the latter in financial
planning.
"I feel quite passionately that unless you understand your history and
your background and what's going on in your mind, you can't move forward,"
she says.
She took two years to write the book in plain, easy-to-read English. It advocates strategies but with simple-to-fill-out financial inventories or worksheets and straightforward explanations of investment products, part of a how-to-do template. Ms Sutherland knows her audience. She was somewhat taken aback when a male colleague advised her against focusing on women only. "I remember one guy saying to me very severely: `Do you realise, Sheryl, you'll cut yourself out of 50 per cent of the market?' I'm thinking, `That's okay, I don't mind 100 per cent of 50 per cent of the market'."
Now her circle of friends – sometimes drawn from conference and seminar work – includes television news reader Suzy Aiken, businesswoman and writer Jenny Phillips and Carmel Fisher, of Fisher Funds. They have given great feedback, she says. The book was launched by another friend, employment law specialist Linda Penno. Ms Sutherland is amazed at how quickly the manuscript was picked up by Longacre Press, which has published it under the Shoal Bay imprint. An editor at the publishing house cut some of her favourite women's economic history, but Ms Sutherland is used to a critical audience. She started financial planning in 1981 and from the late 1980s has run her financial planning seminars for clients including government departments and educational institutions. It was tough starting out. "They were scary. I was just as scared as anyone else (would be). The first few I had to do sitting down, my knees wouldn't hold me up," she says.
Facing 200 people at a time, including
"professional seminar-goers" and tyre-kickers, was another challenge.
"One woman stood up and said she didn't understand why I was excluding
men and I was sexist.
"I actually thought she was going to be lynched – it was actually
quite funny." She was drawn to Christchurch from her Dunedin base by
the prospect of a larger base of clients willing to pay on a commission or
fee basis.
Financial planning is still a growth industry, led in the United States by such corporate giants as Citigroup's Women & Co, Oppenheimer & Co and American Express. There have been huge developments in the past five to eight years, and New Zealand has lagged behind, she says. "But that's okay – it gives people like me time to get locally positioned." To Ms Sutherland, the key to financial planning is listening to the client and coming up with a comfortable investment strategy aligned with a basic financial education. She notes that American investment guru Warren Buffett has used the term "deworsification" in relation to an unfocused strategy. Mr Buffett says: "Wide diversification is only required when investors do not understand what they are doing." Ms Sutherland adds: "If you haven't got your finances structured you can't get on with the rest of your life." She advises most clients to do a 12-month plan and to get together with their partner at least once a month to see how the plan is going. Also, income protection "is something women are just waking up to", she says. "My feeling is the reason we tend not to insure ourselves is because we undervalue what we produce and that obviously goes way, way back historically." Ms Sutherland has two more books planned. One with the working title Investment Gain Without the Tax Pain and subtitled Secrets for Tax-Smart Investing, which is planned for publication in the middle of next year. Her third book, to be called Money, Money, Money Ain't it Funny, will be based on the relatively new area of neuro-economics, which looks at neuro-science, economics, and psychology to study how people make choices. The book, to be published in 2007, is potentially also for an overseas audience.
Website links featuring articles by Sheryl Sutherland
The
40-Year-Old Savings Virgin: Will this be you?
By Sheryl Sutherland | NZ Girl
Money
& Love: Pre-Nuptial Agreements
By Sheryl Sutherland |NZ Girl
CHAMBER OF COMMERCE MAGAZINE ARTICLES
Article One
We all like to think we are rational
beings when surveying the irrational behaviour of others. Most financial theory
reflects the idea that each investor carefully considers all available
information, in a rational way, before making investment decisions. There is
however much evidence which shows this is not necessarily the case. As one
investment manager puts it – if you sit down at a poker table and
can’t spot the sucker who will be taken that night, get up –
it’s you!
Behavioural Finance, a study of investment behaviour, draws on psychology in an effort to show why people buy or sell when they do, – or why they don’t buy at all. This research into investor behaviour helps to explain the various market anomalies that challenge standard economic theory. The key ideas in behavioural finance include prospect theory, regret theory, anchoring, and over or under reaction.
Prospect theory suggests that investors react differently to equivalent situations, depending on whether the likely result appears as a potential loss or a potential gain – a bit like the half full/half empty glass attitude. Typically, we become much more distressed at the prospect of a loss, than happy by equivalent gains. Casinos know this – above the pokies we see the potential prize, not the far more likely loss ratio. “Loss aversion” means that investors are willing to take more risk to avoid a loss, than to realise a gain. In fact, faced with a sure gain, most investors are risk averse, but faced with a sure loss they become risk takers. According to the related “endowment effect,” people set a higher price on something they own than they would be prepared to pay to acquire it. If this sounds a little to far-fetched to you, consider, in a rational way of course, the price you would place on your home and compare that with price you would pay to purchase it. Regret theory relates to investors emotional reaction to having made an error of judgement, whether it was investing in a portfolio which has plummeted or not investing in one which they had considered and which has subsequently gone up. Or to put it simply, selling at the bottom of the market, or buying at the top – typical investor behaviour! Investors have reported avoiding selling when values have gone down to avoid the regret of having made a bad decision and the embarrassment of reporting the loss. It may be easier to follow the crowd – if you have subsequent loss it can be rationalised as everyone else did the same. Going against conventional wisdom is harder since it raises the possibility of regret if decisions prove incorrect
Anchoring is a phenomenon in which investors assume current
prices are about right. We saw this in the not too distant past – each
new high during the 90’s bull market was anchored by its closeness to the
last record, we have had the same response to the current bear market –
each new low brings with it the expectation of a further low. Writing this
three days into the invasion of
The theory of over or under reaction probably needs little explanation – investors tend to put too much weight on recent news; investors show overconfidence – becoming more optimistic when the market goes up and more pessimistic when the market goes down. Then prices fall too much on bad news and rise too much on good news.
Two psychological theories underpin these views of investor behaviour the “representativeness heuristic” where people tend to see patterns in random sequences, for example in financial data. The second “conservatism,” is where people chase what they see as a trend but remain slow to change their opinions in the face of new evidence that runs counter to their world view.
So you say, this academic theory is all very well how can it be of practical help? Two sides of the coin (sorry about the pun), financial criteria and approach need to be integrated for you to be an effective investor. The strategies that are the most profitable are a result of successful investors being able to accept any behavioural tendencies they have and invest accordingly. If you are unable to do this, your financial plan can turn to custard. You may start out with the best intentions but irrational motives, misperceptions and beliefs can lead to poor decisions. Here are some of the errors investors make:
- Investors may overestimate skills attributing success to ability they don’t possess, seeing order in information or data where it doesn’t exist, or distort information to add weight to their decision.
- Investors are often unable to alter beliefs, falling in love with their investments, remembering their successes and forgetting failures.
- Avoiding risk when there is a chance of a certain gain but when faced with loss become risk takers – the loss of a dollar is felt more keenly than the profit of a dollar.
- Investors often make a distinction between “hard earned money” and “found money,” that is found money is more easily put at risk.
- Investors tend to think in extremes, taking short term views – losses lead to suspicion and caution while recent gains lead to action.
- Investors often assume that lack of market movement represents stability while volatility represents instability.
- Investors follow the crowds, are heavily influenced by other investors or compelling news.
- Fail to check facts and make predictions based on limited information.
Overall these errors really have one effect,
especially when uncertainty, inexperience, attitudes and market pressures come
together, they undermine decision-making ability. The way to overcome any
possible problems is to implement a good investment strategy, with an exit plan
,if you feel you need one.
Back to top
Article Two
In 1995 the Prime Minister of Pakistan addressed the UN Conference on womens, she said that women cannot control their lives and make their own choices until we have financial independence – economic equality. International institutions such as the World Bank, acknowledge that there is a growing body of evidence which clearly demonstrates that economic inequality is bad for economic development generally.
For generations as we know women’s
financial lives have been dependent on that of men. Many of us were brought up
to think that there was some benevolent father god watching over us, handing
out goodies to well behaved girls. Despite this however, many women are
changing their attitudes to business and to investing. Women entrepreneurs are
starting companies at twice the rate of men, moving into construction,
transportation, agricultural and manufacturing services. American owned
businesses generate over 3 trillion annually and employ almost thirty per cent
of all
In the investment world we are even starting to better men in some areas. New research shows that women’s portfolios gained 1.4% per year more than men’s portfolios in a study which spanned from 1991 to 1997. In fact single women did even better than single men gaining 2.3% greater returns on their portfolio.
A separate survey of investment clubs produced similar results. Women excelled over men. The ten-year investment study showed that all female investment clubs outpaced all male investment clubs, with a 23.8% averaged compounded annual return, compared to 19.3% for the male clubs. Obviously these surveys did not include the last rocky period. The figures per se are not as important as the message they convey. We are able to use our innate skills to secure our financial futures. So what are we doing that’s right?
Women look at more than just the numbers. As a response to the math anxiety and lower confidence in our financial prowess we make investment decisions based on our life experience. In choosing an investment we consider issues such as the quality of the product – we are comfortable with buying quality – we are good at that. One survey found that women can spend up to 40% more time than men on researching and we are much less likely to act on a hot tip.
Women take fewer risks nearly 32% of women labelled themselves as conservative investors compared with 22% of men – this translates into not chasing high returns but implementing a strategy rather than chasing market cycles. In fact, men traded an impressive 45% more than women. The survey showed also that women have less confidence in their investing abilities only 55 per cent of women felt confident versus 65% of men.
A recent survey on women and retirement however made more sobering reading. Over 33% of women surveyed avoided making financial decisions through fear of making a mistake, often deferring making financial decisions and leaving money management to the men in their lives. In addition only 27% of women were willing to take substantial financial risk for substantial gain – versus 42% of men. This can be a drawback as in long term investment some risk is essential for capital gain.
We are not doing so well in the accumulation stakes - Men report more than double the current savings amount towards retirement, this same pattern holds true when projecting the amount women expect to have saved by 65. Currently women’s retirement income is around two and a half times less than a man’s furthermore women are more likely to be unsure of the amount they have saved for retirement.
So dear reader where does this information lead us. We are obviously more than capable of investing, understanding markets and implementing appropriate financial strategies. On the whole we probably are not taking enough risk in out portfolio and some of us are even reluctant to face money and investment. We are now witnessing the return of the economically powerful woman – but we may be more tentative when it comes to investing for retirement. Still we have a growing edge over men when it comes to cultivating positive attitudes about work and later years.