The Power of Intentional Investing

Studies show that women investors tend to perform slightly better than men, yet they have less confidence as investors.¹ Digging deeper into these investing studies reveals some best practices that women may want to consider when investing.

Investing differences between men and women

Why do women investors tend to perform better than their male counterparts? Studies show women are more likely to assume a moderate level of risk, whereas men tend to invest more aggressively.² Women also seem to exhibit greater investment discipline — they are less prone to invest in speculative assets, quicker to sell losing investments, and more likely to develop and stick to a long-term investment strategy.³

If women have demonstrated the ability to perform as well as — if not better than — men when investing, then why are they less confident? A study completed by George Washington University identified four indicators as proxies for investor confidence. Across all four indicators, men scored better than women (see Table 1).⁴

The study asked a group of investors 10 questions designed to assess investment knowledge. Male investors answered more questions correctly compared to female investors, averaging 5.2 versus 4.1 correct answers. Analyzing the study results, the researchers identified confidence indicators and linked investment confidence to investment knowledge.

Why investing matters

Women’s success as investors is particularly critical to their financial future. As Nichole Walker, a senior wealth planner at City National Bank, explained, “Longevity is a key driver underscoring why women need greater savings to sustain them through a longer life expectancy. In addition, the wage gap and the loss of income that can occur when they become the primary caregiver highlight factors that can negatively affect the amount women can earn, which, in turn, can impact how much they invest over time.” By gaining confidence in investment acumen, women can improve the likelihood of their investing success and help them prepare for their future.

Understand yourself as an investor

People approach investing with different attitudes, levels of interest and knowledge. “When starting out with a new client, I try to understand how that person relates to money and what motivates and interests them,” explained Carolyn Finer, a senior investment strategist with City National Rochdale. “With this information, I can structure conversations in ways that make sense to the client. And I can anticipate possible traps to avoid.”

Finer elaborated, “For example, I worked with a client who recently sold her business and was unfamiliar with markets and investing. Therefore, I initially focused on helping her understand the issues to consider when investing. She had a low risk tolerance, was interested in generating income and wanted to address the effects of market volatility through portfolio construction. Knowing she potentially had 30 or more years to live, we talked about the tradeoff between risk and return. I showed her how we could increase potential returns without a significant increase in investment risk. As a result, we were able to create an individualized approach that aligned with her long-term goals of supporting her family, including her children and grandchildren, while being mindful of her risk tolerance and investment experience.”

Set goals and establish a plan

Heading out on a journey without a plan is like being dropped in the middle of the ocean and letting the prevailing currents and winds propel you to some final, unknown destination. The same is true for investing — having a plan allows you to take control. When making investment choices, implement your portfolio in a measured and methodical manner. Think of your goals as desired locations along your journey and your plan as a navigational map that helps you reach critical milestones.

“Our investment approach focuses on clients’ goals, such as paying the grandchildren’s tuition, supporting the community philanthropically and not being a burden to children during retirement. Then, we help our clients think about their total wealth and how that wealth should get subdivided into buckets to meet their individual goals,” explained Joanne Landa, a senior portfolio manager for City National Rochdale.

Implement with intention

It isn’t unusual for newer investors to start with a broad objective of building wealth by growing the value of their investment portfolio. But without a clear path, this could result in a mixed portfolio assembled without regard to how the investments should work together to meet income-generation, growth, risk and tax-minimization goals.

Your investment choices need to align with your goals. As Landa shared, “In a recent scenario, the patriarch of our client’s family passed away, leaving the matriarch to manage the family wealth. She was very concerned about having sufficient income so she would never be a burden on her family. We customized her portfolio to include high-quality dividend-paying stocks and a higher-yielding bond strategy. Whenever we meet with the client, we reaffirm her goals to help ensure the portfolio remains aligned to her financial interests and needs.”

Be in control of your investment plan

The world of investments is quite broad and can feel insurmountable. At City National Bank, we begin by learning about your goals, timelines, personal risk tolerance, tax situation and other factors.

Your advisors will keep you informed and help you think through your goals and aspirations to create an investment plan that keeps you in control. “Leveraging our team’s level of expertise and depth of knowledge allows us to provide a greater level of service to our clients. Our colleagues work together to share their knowledge so clients can make informed decisions around their investments and goals,” explained Landa.

Once we have an agreed-upon strategy, your portfolio manager begins to invest your funds over a horizon that considers current market conditions and the potential tax consequences of our actions. But our work isn’t done after investing your funds. Instead, we continuously monitor your portfolio using agreed-upon benchmarks to gauge performance and help identify when adjustments may be needed to support your goals.

In addition, we’ll remain in regular contact with you to provide updates and reaffirm your plans. If your goals change due to life events, a change in priorities or other factors, then we can make the necessary adjustments to your strategy that reflect your personal needs.

Our role at City National Bank

At City National, we strive to be your trusted advisor. We’re here to encourage and support you along your journey and deliver engagement, information and inspiration at every step. We are familiar with the different factors that may make a woman’s financial journey unique. Our teams are experienced at working with women and are ready to provide you with insights and advice for building and managing your wealth. We can work with your other advisors to keep parties informed and help coordinate plan execution. We consider how the components of your plan work together, watching for unintended conflicts with other elements of your strategy. We want to help you be engaged, informed and inspired as we help you reach your goals.

Engaged: We recognize that each client chooses a level of engagement that fits their needs and interest, and we are prepared to work with you as you desire. From planning through execution, we listen intently to your personal goals and aspirations and make it our priority to help bring those dreams to life. We want you to see your relationship with City National as an opportunity to use your wealth to support your goals and aspirations.

Informed: Managing wealth is complex, and additional knowledge is always beneficial. Regular communication helps ensure you understand your portfolio’s performance compared to your plan goals, and recommended adjustments help keep your portfolio on track. We’ll connect you to the information and resources you need to feel confident in your choices and decisions about your wealth. In addition to one-on-one conversations with members of your relationship team, you have the opportunity to participate in client roundtables and webinars to expand your understanding.

Inspired: Your personal financial journey has already begun. By working with City National, we hope you further realize how your wealth creates many opportunities for you and those you cherish. Whether that is to make a difference for your family and community, enhance your own life, or provide for future generations, we are here to support you and your dreams.