Cents & Sensibilities: Prudential Securities' Investor Zone Update Finds Women Gain Investing Confidence But 'Gender Gap' Remains Intact.

NEW YORK--(BUSINESS WIRE)--March 8, 1999--An update to a benchmark 1995 study on women and investing released today by Prudential Securities found that womens' investing confidence has grown; they are less fearful of making mistakes with money; and they are more willing to consider taking risks on investments than they were three years ago.

However, the study found that men still outnumber women as the most active and assertive investors, and that womens' improving confidence in their investing abilities is still tempered by a tendency toward caution.

"Our study clearly identified that women are growing more empowered financially," said Michelle Laughlin, senior vice president and treasury market strategist for Prudential Securities. "They are more confident in their abilities, more willing to take some investment risk and more optimistic about the future."

Kim Calero, president of the National Association of Female Executives (NAFE), said: "Women have had a major impact on 80% of all purchases made in the United States. However, they still have a long way to go. Women are taking a more assertive role in money issues, but until a balanced economic field is developed, they will not feel comfortable taking any size of investment risk. This is unfortunate because women tend to outlive men, and take time off to raise families or care for parents, while earning 75 cents to the dollar compared with men. Women need to invest more than ever to ensure a secure future."

Investor Zone Update was based on a telephone survey of 851 randomly selected households conducted in December 1998. An update to a 1995 study, Investor Zone Update placed investors into three different categories based on an extensive questionnaire that gauged their "confident" and "cautious" attitudes:

-- those in the Action zone are goal oriented, willing to take

risk and feel confident about making investment decisions;

-- those in the Comfort zone prefer "safe and guaranteed"

investments, are more nervous about the unknown and are

concerned about making mistakes;

-- those in the Cautious zone are too occupied with the ups and

downs of everyday living to spend time planning effectively

for their financial futures.

The study found that women are now significantly more inclined to take risk than they were in November 1995. Then, 45% of them said they "think investing is just too risky." Now, only 25% agreed with that statement. More women today (38% vs. the 1995 figure of 26%) said they are "willing to take substantial risks in hopes of making substantial gains."

While Investor Zone Update found women to be nearly as confident as men in their financial acumen, the effects of their confidence was mediated by what the study defined as more "cautious" attitudes. Fifty-seven percent of women, compared with 42% of men, said they are "usually the one who gives in when plans conflict." Some 48% of women but only 34% of men said the "ups and downs of the stock market make me nervous." And 38% of women, compared with only 29% of men, said "conversations about money and investing are boring to me."

When the study was first done in 1995, 72% of women said they are "open to considering new investment opportunities and strategies, compared with 80% in 1998; 41% said they "often put off making financial decisions for fear of making a mistake," compared with 32% in 1998; and 69% said "financial terminology is confusing to me," compared with 58% in 1998.

Both Men and Women Are More Confident

In fact, the study found that both men and women have become more confident in their abilities to invest, possibly because of the powerful bull market of the last four years. That suggests that a 'gender gap' still exists. Both sexes are:

-- optimistic about the future, (women 73%, men 76%);

-- look forward to retirement (women 72%, men 71%);

-- have a specific savings plan for retirement (women 69%, men

77%);

-- and think it is very important to become an accomplished and

active investor (women 69%, men 71%).

More women today (43%) are members of the Action zone, compared with only 29% in 1995. But 64% of women are still in the Comfort zone, compared to 55% of men. Men still outnumber women as members of the Action zone (58% vs. 45%).

Who Does The Investing?

While decision-making is shared among couples, the study found that men still do most of the investing. Only 15% of married women describe themselves as the "main decision maker," and 78% said they share the decision-making responsibility. Among married men, about one-third say they are the main decision maker and two-thirds say they share the responsibility.

"It's important to remember that at some time in their lives, nearly everyone -- both men and women -- will be responsible for their financial futures," said Laughlin. "We continue to recommend learning about the financial markets as a way of continuing to gain confidence and financial acumen."

The National Association for Female Executives (NAFE) is the largest business womens' organization in the country, with 130,000 members nationwide, and the largest women's business owners' organization, with 26,000 members nationwide. NAFE provides the resources and services -- through education, networking and public advocacy -- to empower its members to achieve career success and financial security. The professional achievements of its members demonstrate its founding principle: when a woman succeeds, a company succeeds.

Prudential Securities Incorporated is a fully diversified, global securities firm based in New York City, serving clients in the US and overseas through more than 6,500 Financial Advisors. The fifth-largest brokerage firm, Prudential Securities is a subsidiary of the Prudential Insurance Company of America.

-- The survey conducted is based upon a random national sampling of

the US population. The participants in the 1998 survey may not

have necessarily been a participant in the 1995 survey.

Comparison percentages made between the two surveys are based

upon responses from households with incomes of $50,000 or more.