Save as...: How women invest

There is certainly a difference. The choices women make when it comes to investments are generally considered too timid, too conservative, too risk-averse. What's interesting, though, is that the aims of women are also the aims of all cautious investors with a lot to lose. The challenges they face - interrupted careers, unsteady income arcs - are shared by millions around the world (think, gig workers, caregivers, entrepreneurs). Could a shift in how the world of finance views such lives benefit us all?

- Kashyap Kompella

Like so many things—the office AC settings, pain relief formulas, heart-attack symptoms—when it comes to finance, women live in a world that was designed for men.

This, rather than any inbuilt aversion to risk, is why women invest differently. Finance was not built around their economic lives.

Their investing behaviour is nonetheless still viewed as a matter of temperament: Too cautious, too conservative, too risk-averse. This diagnosis, convenient but inaccurate, treats outcomes as preferences while ignoring a fundamental lack of choice at various levels.

Before we look at how this plays out in the markets, a quick look back.

Women's bonds with finance far predate modern banking, of course. Historical records describe women lenders, treasurers and estate managers across centuries and around the world. Chola and Vijayanagara temple inscriptions from south India record women managing endowments and lending jewels. In Tamil Nadu, Chettiar wives and mothers ran the domestic ledgers of sophisticated private banking networks while the menfolk were abroad. In Varanasi and Bengal, widows lent to landlords and traders.

These were not marginal roles.

Then colonialism reared its head; finance was formalised, first under colonial administrations, then under national banking systems. As with so much else formalised at this time—democracy, land rights, medicine—the lens through which such systems were viewed was a purely male one.

One might think: Why does this matter? We're equal participants now.

The truth is that, as with the office AC—usually set for the male body, which tends to generate heat more easily because of greater muscle mass—subtle cues built into the system make it harder, not by design but certainly by default, for the average woman.