Man and Woman in life and investments

Discussions on the differences between men and women (and their mental faculties) have been and still are at the centre of various discussions, both scientific and professional, and let’s even say “sexist” (wanting to overlook the clichés that at most can make the audience laugh at comedies and satirical films).
But the central question remains the same: is there a real difference? And yes yes, who’s the “smartest” one?

A long, endless diatribe…

The scientific data show clear and distinct differences between the female and male brains, differences that are genetic, hormonal and structural anatomo-physiological, with important consequences on brain functions and also on some diseases”.
Some recent studies claim that: “the female brain, being more dynamic from a metabolic point of view and accustomed to situations related to hormonal variations, is characterized by greater elasticity.

In complex situations, therefore, the female brain is advantaged, because the female brain is less “rigid” and led, therefore, to analyse a wider spectrum of data and possibilities; on the contrary, the male brain is favoured in simple and tested situations”.

But don’t go too fast: this does not mean that there is a clear and real supremacy, but rather that many of the legends about the dominant male brain are actually, in fact, only legends, not supported by scientific data.
In the typically male-dominated and traditionalist world of finance, the process of accepting the non-sustainable dominance of the male brain in management teams has begun and is already yielding its first results: some asset allocation managers specifically require female fund managers or investment teams made up of females.

Why can the female brain make such an important contribution to the financial world?
As we have just seen, neurophysiological differences exist and are now undeniable: the greater connection between different areas of the brain and the greater ability to think in a “circular” way give women a more performing Mindset in contexts of complex scenarios, while, on the contrary, the male brain shows much more performance in contexts where information is more “linear” and therefore require more direct and proven actions.

In financial terms, the “pink” presence in management teams showed a better propensity to hold more diversified positions, with less risky positions: moreover, the reduced female susceptibility, in the context of teams, to clashes between “alpha“, also showed an easier “admission” of the possible error, with the consequence of more timely corrective actions.
Imagine for a moment having to constantly show the team to be the “dominant” and to fear any admission of error and/or weakness, as if it were the antechamber of the possible attack of another aspiring “alpha”: how easy would it be for you, in such a context, to candidly declare “I don’t know what to do, I have doubts” or worse the fateful phrase “I’m afraid I made a mistake”?

Moreover, the natural attitude of the cognitive brain to want to pursue its reason at all costs (the so-called “bias” of confirmation) would be further reinforced: not only would you not want to admit mistakes, but on the contrary, you would look everywhere for evidence of “reason”!
How much would change the scenario of behavior and evaluation if you had a mindset more oriented to a mixed evaluation, reason but also “intuition”, tendency to drive from “alpha” but at the same time less need to affirm the domain “zero errors”?

The difference between the two brains allowed the woman to better protect herself and her offspring in her “cave”, leaving it to the man to go and explore territories to hunt, with a dose of healthy “brave unconsciousness”, very useful for hunting berries and/or game for the family.

The conclusion is always the same, and is based on common sense as well as neuroscience: only by walking arm in arm, male and female, they get the most and see reality better.

Previously published on the Italian personal finance blog RenditePassive