What kinds of financial risks do women prefer to take?

As mentioned, women make up about 5 percent of an average trading floor.  But these numbers change dramatically when we leave the banks and visit their clients, the asset-management companies.  Here we find a much higher percentage of women.  The absolute numbers are not large, because asset managers employ far fewer risk taker than banks, but at some of the big asset-management companies in the United Kingdom women make up as much as 60 percent of the risk takers.  This fact is, I believe, crucial to understanding the differences in risk taking between men and women.  Asset management is risk taking, so it is not the case that women do not take risks; it is just a different style of risk taking from the high-frequency variety so prevalent at the banks.  In asset management one can take time to analyze a security and then hold the resulting trade for days, weeks or years.  So the difference between men’s and women’s risk taking may be not so much the level of risk-aversion as it is the period of time over which they prefer to make their decisions.

Perhaps men have dominated the trading floors of banks because most of the trading done on them has traditionally been of the high-frequency variety.  Men love this quick decision-making, and the physical side of trading.

That is from The Hour Between Dog and Wolf.  The author is John Coates and you can buy the book here.  I would consider that hypothesis speculative, but nonetheless I found the passage of interest.


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