Wall Street had no women financial execs when Muriel Siebert started her career as an analyst in 1954. A few years later, after Siebert had proved her mettle, a prospective employer told her that if she wanted a job, she would have to wear white gloves and a hat in the elevator just as all the secretaries did. That gave her plenty of incentive to become the first woman to buy her own seat on the New York Stock Exchange -- in 1967, when she also began her firm, Muriel Siebert & Co.. Since then it has grown into a formidable discount brokerage.
Siebert has always been involved in educating investors. And in a recent renewal of that commitment, Siebert & Co. purchased Women's Financial Network, a Web site dedicated to educating women about investing. There isn't much Siebert doesn't know about the topic. Recently, BusinessWeek Online's Margaret Popper spoke with Siebert about her views on women and investing. Here are edited excerpts of their conversation:
Q: Do women face unique issues when it comes to investing?
A: I think the unique issues are those of culture. In some cases, the woman just doesn't get involved in handling money in the family. And in other cases, the women run the money.
It's also that they're just starting to get the knowledge. Younger women are much more aggressive in financial matters. They aren't afraid of that. A lot of [older women] just have not been taught. And that's tough. They're scared. They're getting in there, but they just haven't been taught yet. Once they understand that they're going to have to do this, they get much better.
Q: And how do they come to that realization?
A: They get a divorce. They don't know what to do. They get into problems with credit cards. They talk to friends that are changing jobs and want to know what do you do with a 401(k) rollover. And they don't know [anything] about a 401(k) rollover.
Q: Are women investors a big growth area?
A: They're a tremendous growth area [potentially.] We haven't had enough time to see the effects of the market sell-off on women investors vs. men investors relative to the kind of stocks they held.
Women historically have been more conservative. And they were just starting to move into stocks. We don't know how they have fared relative to men. A lot of men [investors] have blown themselves out of the water [in the current market.]
Q: Over the long term, being conservative could mean that women have gotten lower returns on their portfolios.
A: Yes, they have. A lot of women have more in fixed income. So last year, it held them in good stead. They had held Treasuries and good quality bonds or bond funds. They came out much better [than their male counterparts who invested in stocks].
Q: Does the investment profile of Gen X women investors look more like men's of the same generation?
A: We have seen more aggressive women compared to years ago. Women often have a different investment reason. They want money for something. I want to save money for a house. I want to earn money for my child's education. To a lot of men, money is power. They trade much more than women. They're doing it for excitement.
Q: So you see more trading activity in men's accounts?
A: Yes. You have many more men as day traders.
Q: How would you like to see women investors evolve as a group?
A: I have told them when I speak to them they should write a check to themselves every month [for] their investments, at least as much as they put in the most expensive clothing they buy.
A lot of women have assumed they would be taken care of [financially throughout their adult lives,] and they're starting to see cases where they're not being taken care of. They see their aunts and their mothers and their sisters and cousins and coworkers, and they realize they're going to have to take care of themselves.
Q: Among women, there's generally more of a sense that their careers will be interrupted at some point by child rearing. How does that affect them financially?
A: That's very true. That's why they end up getting lower Social Security. So it's imperative that a woman with a working husband invest in her own IRA accounts. A lot of them don't. I don't care how they do it. They should get a part-time job and just fund the whole IRA.
Q: What can women do about financially supporting parents or kids?
A: The "sandwich" generation is getting it both ways. They are worried about their parents, who might need help, and they're worried about their kids and their college. There are ways to put money aside for your children. Those programs are alive and kicking, and do very well.
Q: And what are some you recommend?
A: There are different plans that are exempt from taxes. There are a couple of new savings plans. There's one plan, one tax law that was passed where you can put $50,000 into a child's education fund. You can't put any more in for five years, but you can put it in without gift taxes or anything else in one lump [sum.] So you open up an account like that, and if anybody is going to give you gifts when you have a child, put those in this account.
You can only draw [money] out for certain reasons. There's a list of legitimate education reasons. That [kind of educational savings account] wasn't around 10 years ago.
Q: Should women who are investing neophytes be worried about a financial adviser taking advantage of their investing ignorance?
A: Somebody gives you: "Don't let it bother your little head, darling; we'll take care of it for you" -- you're in the wrong place. We've had complaints from women who had trust department accounts. "Don't bother your little head; we'll take care of it for you," and then 20 years later, they find out they have almost no capital left. They've been going through their capital, and they thought it was income.
Also, if somebody tells you they're going to make money for you fast, run the other way. It isn't going to happen. Very rarely does that happen, and you end up keeping that money.
If you're looking for an adviser, you want somebody you can talk to initially once a month, and probably once every three months, you want to see a statement. If it's an investment adviser, you want to get a copy of the brokerage statement. If they're running your account as an individual account, you want to get a statement every month.