The legacy of language in the finance sector

Have you ever thought about the type of language that's used in the finance sector?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Have you ever thought about the type of language that's used in the finance sector? Without having to think too hard it's easy to come up with a number of some traditionally masculine examples, such as "building" a portfolio, the ASX "fighting" its way upward, watching a share or stock market "tank", then there's dawn raids, Death Star IPOs, Samurai bonds, scalping, whipsaws and kill orders, to name a few.

A study published by Tilburg University in the Netherlands in 2015 found that the language and metaphors in investor communication come from the same source domains which include war and combat, heavy physical activity and building and construction.

Now, this is definitely not to say that men like war, or that women don't like sports and physical activity. Masculine language in finance is a product of legacy. It wasn't so long ago that women worked only if they were not married. In the past, it was sons, not daughters that inherited a family's wealth. In fact, if you go back to Jane Austen's time, the only investment decision made by upper-class women was in choosing a wealthy bachelor to marry. It's not so strange then that finance, a typically masculine sector, would use some typically masculine language.

The Dutch study also found that this kind of language works to exclude, rather than include women investors. It is a fact that women participate less in the stock market than men, and if they do, they generally take less risk. This gender gap in financial decision-making is often explained due to differences in risk tolerance and financial literacy, but the gap can also increasingly be attributed to the degree to which men and women identify with the language used in the finance sector. While masculine financial language works to exclude women, the study also suggested it creates feelings of familiarity and belonging among men.

Language and the way products are marketed are important drivers of inclusion and exclusion. A good example of this was the changes in marketing tack by both PepsiCo, Inc. (NASDAQ: PEP) and The Coca-Cola Co (NYSE: KO) in the way they marketed their diet soft drink products in the 1990s and 2000s. Marketers found that amongst male consumers, the word "diet" evoked images of the world of women and brought to mind the idea of fitting clothes and spending time in front of a mirror, so Pepsi Max and Coke Zero were born.

Due to increased female labour market participation and changes in socio-demographics, women as much as men are involved in taking care of their finances. So, could there be a time in the future where we knit or weave our portfolios rather than build them? Or perhaps a more gender-neutral financial language will emerge. Only time will tell.

Motley Fool contributor Bronwyn Bruce has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Boys making faces and flexing.
Opinions

3 ASX 300 shares to buy and hold for the long run

I believe these stocks have loads of growth potential.

Read more »

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Record Highs

The ASX 200 Index is on its way to another all-time high today. Here's why

These blue chip stocks are driving the index towards a new record today...

Read more »

Group of friends trading stocks on their phones. symbolising the 3 most traded ASX 200 shares today
Share Market News

3 ASX mining stocks topping the most-traded list in October

Chinese stimulus news and company announcements likely contributed to the higher trading activity.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

Two people tired and resting after sports race.
Broker Notes

Fundie rates 2 ASX 200 stocks in short-term pain but with long-term gain potential

Blackwattle Investment Partners sees these 2 ASX 200 stocks as worthy of a buy and hold strategy.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Megaport, Pilbara Minerals, Vysarn, and WiseTech shares are falling today

These shares are ending the week in the red. But why?

Read more »