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“Statistically, women are better investors than men and are more reliably profitable” with Mary Ellen McGonagle and Tyler Gallagher

The financial scandals of the past two decades created a wave of new regulations and enforcement that pried open the previous ‘fraternity’ environment. When you combine that with the information ease that was created with the internet and social media, then the old boy network of quiet deals between banks, public companies and institutional investors […]

The financial scandals of the past two decades created a wave of new regulations and enforcement that pried open the previous ‘fraternity’ environment. When you combine that with the information ease that was created with the internet and social media, then the old boy network of quiet deals between banks, public companies and institutional investors quickly came under pressure. In an era when almost all information is now widely available the value of the former‘ information gatekeepers’ (a more polite name for “all white boys club”) is greatly diminished. When the playing field becomes leveled, some interesting results begin to emerge. Recent studies by both Barclay’s Bank and Fidelity Investments reveal that, statistically, women are better investors than men and are more reliably profitable. According to Barclay’s studies, women earn yields roughly 1.2% higher than men, trade much less frenetically and are longer term investors. While a 1.2% difference appears small at first glance, over twenty years, that represents a 27% performance improvement. Only the most tradition bound financial institution can casually overlook that level of performance and its made compelling financial logic to bring women into the mix in greater numbers.

As a part of my series about strong female finance leaders, I had the pleasure of interviewing Mary Ellen McGonagle, a veteran of Wall Street where she began her career on the trading desk of Goldman Sachs. For over 15 years, she advised top portfolio and hedge fund managers on stocks and the markets while with William O’Neil & Co. which is renowned for its expertise in momentum stocks. More recently, Mary Ellen founded her own research firm www.MEMinvestmentResearch.com where she is dedicated to sharing insights into how to uncover and then trade the next big, winning stock. She is also a Senior Technical Analyst at Stockcharts.com where she hosts the weekly MEM Edge Show as well as Chart Wise Women. With her bi-weekly newsletter and many educational resources, she’s regarded as an expert in the field of equity trading.


Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Banking/Finance field?

It was a happy accident. After graduating from college, my best friend from college invited me to move to New York City where I signed up with a temp agency until I found my “real job”. One of my first assignments was with someplace called Goldman Sachs in lower Manhattan. To be frank, I had never heard of the company but landing on their fixed income trading desk was the best thing that ever happened to me.

The daily routine on a trading desk was what I was looking for in a job — fast action, controlled chaos and quick numbers but it included a subtle degree of irreverence that I’ve grown to really enjoy. There is an image of this industry of comprising very stiff, somber formal people but the actual reality is that the best traders are often quirky, fun, very bright and willing to think outside accepted norms. It’s the nature of this beast and it’s why I keep coming back for more.

Can you share with our readers the most interesting or amusing story that occured to you in your career so far? Can you share the lesson or take away you took out of that story?

Are you working on any exciting new projects now? How do you think that will help people?

I’m working on an exciting project where I’m co-hosting a women-oriented show focused on actively involving them in investing. Historically, women invest 40% less than men and they’re more conservative. This can really impact their quality of life — particularly in later years when funding is needed most for healthcare and general living expenses.

My growing passion is helping women become more confident trading stocks and education is the key first step in investing success as is having the proper tools. The focus of the show is to engage women in a non-intimidating manner from a female perspective and teach them the basic tools and techniques of finding worthwhile stocks to invest in and teaching them the right times to enter and exit the stocks. To date the response has been tremendous and is growing rapidly. We’re very hopeful that teaching women how to screen potential stocks that draw their attention will increase direct female participation and bring confidence to a group of investors that control over 55% of all investable assets.

What do you think makes your company stand out? Can you share a story?

I’ve spent many years working directly with some of the best traders, both nationally and internationally and the best ones all shared a single trait: they found a relatively simple way to quickly analyze hundreds of stocks and they never focused on any stock until it passed their simple sniff test. Different traders had different sniff tests but they were all able to avoid the massive information overload and group think that would overwhelm average traders.

MEM Investment Research has taken a number of these screening techniques used by the best traders and makes them available to non-institutional, private traders. We’re passionate about leveling the playing field for people just like my neighbors, friends and family. We have training courses available but most people subscribe to our bi-weekly newsletter, which goes into depth about why specific stocks make sense and gives real time examples of identifying trends early. I began this non-institutional focus when I agreed to give a series of lectures to a local community group (which led to invitations from other groups) and it became clear that there was a huge thirst for normal people to ‘peak behind the curtain’. I gradually became an evangelist for tearing down that curtain and here we are today.

Wall Street and Finance used to be an “all white boys club”. This has changed a lot recently. In your opinion, what caused this change?

The financial scandals of the past two decades created a wave of new regulations and enforcement that pried open the previous ‘fraternity’ environment. When you combine that with the information ease that was created with the internet and social media, then the old boy network of quiet deals between banks, public companies and institutional investors quickly came under pressure. In an era when almost all information is now widely available the value of the former‘ information gatekeepers’ (a more polite name for “all white boys club”) is greatly diminished. When the playing field becomes leveled, some interesting results begin to emerge. Recent studies by both Barclay’s Bank and Fidelity Investments reveal that, statistically, women are better investors than men and are more reliably profitable. According to Barclay’s studies, women earn yields roughly 1.2% higher than men, trade much less frenetically and are longer term investors. While a 1.2% difference appears small at first glance, over twenty years, that represents a 27% performance improvement. Only the most tradition bound financial institution can casually overlook that level of performance and its made compelling financial logic to bring women into the mix in greater numbers.

Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a)individuals b)companies and/or c) society to support this movement going forward?

There’s a hierarchy within investment banking and to make it to a senior position, you have to be a rainmaker and willing to endure 18+ hour days and weekends. In investment banking, most of the banker’s interaction is with the CEO’s and CFO’s of major corporations. By nature, you’re navigating a male dominated universe and there’s no doubt that it comes with a certain culture that most women are not comfortable with. Investment or Portfolio Management is much less focused on gender so if someone can grasp the markets and make decisions that help them outperform, it doesn’t matter whether you’re a woman. Much of the job requires culling information from either company management or Wall Street analysts and formulating an educated opinion. The intuitive nature of these decision-making skills can favor women.

Three things that can be done to support movement going forward:

1) Begin educating women early about the opportunities within Finance. There’s still a mystery shrouding what goes on and the barriers to entry appear high. Both of my daughters attended an all-female high school and while they promoted robotics and technology where they brought in experts and participated in competitions, there was no focus on Finance and the tremendous opportunities there.

2) Companies can be more proactive as well. By sponsoring female forums or competitions

3) It gets more difficult on the individual level but we are seeing a pickup in the number of women reaching out for help. One of the issues is a lack of female advisors they can turn to as stated in this Barron’s article here. Again, most women aren’t aware thatfinancially advising others is even a possible career path.

You are a “finance insider”. If you had to advise your adult child about 5 non intuitive things one should do to become more financially literate, what would you say? Can you please give a story or example for each.

Financial literacy — having the knowledge to make informed financial decisions — has been linked to wealth accumulation, stock market participation and retirement planning. The good news is, the amount of information that’s available to both men and women has grown exponentially.

1. One of the easiest things is to subscribe to the Wall Street Journal — this publication can be a wonderful introduction to the world of business and they offer an affordable student subscription rate. The journal has expanded their coverage so that they entwine lifestyle articles that provide finance related insights but are more engaging to those not initiated into the world of finance.

2. Fintech — there are a number of apps out there that can help — Mint is a good example as they offer intuitive, easy to use tools that help women stay on top of their finances

3. Listen To Money Podcasts or Attend Seminars — For example, Fidelity Investments is very committed to helping women increase their financial literacy as their studies have shown that becoming educated is the first step to engagement

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

My mentor was Barbara Jacobs who was my direct boss when I began at Equitable. She was a Portfolio Manager/V.P. who was very passionate about her work and who took a real interest in my progress — often giving me projects that would help advance my knowledge of how the markets worked. She would invite me to Industry events and client dinners. She picked up on my strong work ethic as well as my keen interest in the markets. This was a whole new world to me that I had no idea existed. I was promoted from assistant Portfolio Manager to run money and from there went on to manage over $2 Billion in assets. Barbara was an incredible mentor who went on to become the first female head of International Equities for the country’s largest public pension fund manager. I still think of her all the time.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

My favorite life lesson quote is from the bestselling author Claire Cook who said “If plan A doesn’t work, the alphabet has 25 more letters” There are always going to be obstacles in your journey and it’s important to realize that plan A might not always work. To see possibilities where others may see failure will set you apart.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

My movement would involve helping women realize that they can thrive as they get older and that there are always possibilities to begin a new chapter regardless of their age.

Thank you for all of these great insights!

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