Is it a surprise women aren't keen on investing when the stock market language is so male oriented?
- Written by Jose Sanders, Professor of Narrative Communication, Radboud University
The language used to describe investing in the stock market is skewed towards masculinity. It is full of metaphors that come from domains traditionally associated with, occupied by, or deemed appropriate for men.
Examples are “beating” the market (war, combat, physical fight), “level playing field” (soccer), and “building” your portfolio (construction). This is the case for different languages and for both websites targeting beginning retail investors and stock market reporting in national and financial newspapers.
People use conceptual metaphors like this in their language, often without realising it, to make abstract concepts (such as financial events and objects) more “imagineable”. A conceptual metaphor is a word or combination of words taken from the concrete, physical world to describe a concept from an abstract world.
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Importantly, our use of these sorts of metaphors is not random; we borrow words from a limited number of familiar domains in the physical world. And this is indeed what we found for the language used in investing.
“Building” in building your portfolio is a metaphor for putting together elements for future safety and comfort. So in theory you could equally well use phrases such as “growing”, “cooking”, “sewing” or “weaving” your portfolio. These activities also involve an effort in putting together elements to make your future life safe and comfortable.
But we don’t, and in fact if you used “knitting” in a discussion or presentation about investing, it would probably make the audience smile, giggle or even laugh out loud. This illustrates that these metaphors are not neutral.
They make certain aspects salient, while hiding others. In investing, for instance, “beating” the market highlights the aspect of competition, not that of making a return in order to have sufficient retirement income. However, you can find some investors that pay no attention to others and trade within the stock market using one of the best investment app platforms available, solely in an effort to increase their financial standings.
C Justin Lane/EPA
Research in marketing shows that words used to describe products and services may have a different impact on consumers depending on whether the they identify with the domain the word belongs to or is associated with.
One example is a study on Diet Coke, which showed it did not appeal to men. When Diet Coke was replaced by Coke Zero, men did buy it. Evidently, the word “diet” called to mind a world men did not feel comfortable with: fitting clothes, standing in front of the mirror. But “zero” did appeal to men: zero tolerance, all or nothing, quantitative rigour.
So it’s not surprising that women are discouraged by metaphors that bring to mind a world they are traditionally not associated with: war and combat, construction and heavy physical activity. The use of such metaphors is hardly likely to create positive affect among women; in fact it could even create negative affect.
Research in social psychology finds that positive feelings towards a concept or product leads to people perceiving lower risk and having higher expectations of returns, people are therefore more willing to invest and trade. In finance, evidence suggests that due to “home bias”, people invest way too much in what is locally, habitually or culturally close to them because it feels familiar.
Familiarity is influenced by imagery and metaphors are an example of this. If the metaphors of investing create a positive affect among men and a negative affect among women, it may trigger stock market participation and risk taking by men, not women.
This may, in part, explain the difference in stock market participation and financial risk taking by men and women. For example, in the Netherlands, still only one in seven investors is female.
This so-called gender gap in investing is often explained by lower levels of financial literacy and risk tolerance among women. However, this explanation is flawed in two respects.
There is little evidence for a beneficial effect of financial education on financial behaviour. Research also reveals that there is no biological difference in risk attitude of men and women.
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Stressing the “need for creating financial awareness among women and girls” is therefore not only belittling to women, it also misses the point when it comes to explaining the gender difference in investment attitudes and behaviour.
If policymakers, regulators and the financial industry wish to reduce this difference, they could start by paying careful attention to their financial language use which reflects their traditionally gendered culture. Adapting and changing this language might not only contribute to lowering women’s psychological barriers when it comes to the stock market, it could also reduce the male tendency of trading excessively and taking on too much risk in the stock market.
Olga Leonhard, communication specialist at Framer Framed, contributed to this article.
Authors: Jose Sanders, Professor of Narrative Communication, Radboud University