How the language of investing could be dividing men and women

Gender parity in the investing world

Back in 1982 — nearly 100 years after launching Coke — Coca-Cola introduced a sugar free version of its iconic soft drink. Diet Coke went on to be a massive hit, especially with women. But that was no accident. Coca-Cola had purposely thrown its marketing expertise into a drink that would appeal to females.

In some ways it’s hard not to be impressed by the lengths that Coca-Cola went to. Over the years it even hired fashion designers like Jean Paul Gaultier, Karl Lagerfeld and Marc Jacobs to design Diet Coke bottles and cans.

But while the company had no problem selling its new drink to women, there was a problem. While everyone could see that low sugar was a good thing, men didn’t buy Diet Coke anywhere near as much as Coca-Cola wanted or expected. It only solved this problem 23 years later, when in 2005 it launched another sugar free drink. This time it was called Coke Zero.

Apart from a few tweaks to the recipe, Diet Coke and Coke Zero are basically the same thing. The real difference is that Coke Zero is marketed at men, and for that reason it’s been a success…

…in fact Coke Zero was Coca-Cola’s most successful new drink since the launch of — you guessed it — Diet Coke.

Marketing professionals usually know exactly how to play on the emotions of men and women. But what Coca-Cola showed in more than two decades between launching its two low-calorie Cokes, was how messaging can alienate an entire gender even if the product is a universal one.

Mixed messages in the world of investing

Fizzy drinks aren’t the only thing that polarise men and women. There’s evidence that we also respond differently to the kinds of imagery, metaphors and messaging that we see in the financial press and stock market commentary.

For example, have you ever thought about the term Build a portfolio? Or perhaps Beat the market? Or how about that investors are regularly drilled on Strategy, Discipline, Tactics, Competition, Gambling, Superior Performance and so on?

Research in recent years suggests that these conceptual metaphors often rely on imagery that subconsciously appeals to men, but can actually alienate women.

As such, male-oriented metaphors could conceivably be part of the reason why women aren’t as active in investing as men, and why men tend to overtrade (and actually see lower results versus women as a result).

These are the findings of two studies: one called Seven ways to knit your portfolio (2013) and a more recent paper in April 2018 called Can words breed or kill investment?

Both explore similar ideas and broadly agree that investing metaphors tend to take their cues from War, Health, Physical Activity, Game, Farming and the Five Senses, many of which are male-oriented. They claim that this masculine imagery could result in women feeling disengaged from investing, with a sense of non-belonging.

By contrast, headlines inspired by images of battle, movement and competition may provoke men into taking action and, as such, encourage the propensity to overtrade in the stock market.

Importantly, Cecilia Boggio who led the research in Seven ways to knit your portfolio, notes this isn’t to say that men like going to war any more than women aren’t interested in physical activity. The point is that these kinds of metaphors in the stock market evoke images of worlds that were populated more by men than women. So they might also be playing some small part in reinforcing the sense that investing is a male dominated discipline.

Both papers make clear that more research is needed on all of this. But whether or not masculine imagery is a real deterrent to women investors is just one part of a conversation about why women aren’t better represented in investing — or whether they just not getting the profile they deserve. Certainly research in the past has suggested that women are often more profitable investors. That’s because they are much more able to control their behaviour. This was the finding of Brad Barber and Terrance Odean’s paper, Boys will be boys: gender, overconfidence and common stock investment.

These were some of the topics that came up in the Women & Investing panel session at the recent Mello 2018 investing conference. The message there was that things are improving for women, but there is still a way to go.

As a writer and interviewer of high profile investors (and as the father of a young daughter) I reckon I’ve got some work to do on this, too. I was struck by a blog last month by Josh Brown (The Reformed Broker) about how he was embarrassed about lack of diversity in his wealth management firm. Likewise, in my recent series of interviews with investors, there were no women — and the first email I got pointing that out was from a lady in New Zealand!

I’m keen to make sure that Stockopedia articles and our community ares as welcoming to everyone as possible. Male or female, if you’ve got any views on these issues (including whether we could do things better) it would be great to hear them.

Originally published at www.stockopedia.com.

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