Ariel Investments and Charles Schwab
Survey Black Investors Together
Ariel Investments, the Black-owned investment firm founded by John W. Rogers, Jr., in 1983, has partnered with investment titan Charles Schwab for 24 years to create a survey that studies the investment habits between Black and white Americans. What they have found over the years is that white investors have greatly outnumbered Black investors, however in 2022, they found that gap is finally closing. Yet it’s not closing fast enough.
More Education is Needed
One of the main factors of the lack of Black investors is education. Many Black individuals and Black families simply don’t understand or don’t know how to invest in the stock market. Thankfully with organizations such as Financial Joy School, which is dedicated to teaching Black and brown families how to build generational wealth, all hope is not lost. Not only do parents and older adults need to be taught how to invest, but the younger generation needs to start investing as soon as they can to have a decent retirement and obtain substantial wealth they can pass on to their children.
Life Signs in the Stock Market
It would seem that while education is the main barrier holding most Blacks back from investing, those who do invest are of the younger generation. Blacks in their 20s and 30s have decided to dip their toes in the waters of Wall Street and these younger investors are the ones closing the racial wealth gap.
In 2022, sixty-three percent of investors were white while an amazing fifty-eight percent were Black. That is a spread of only five percent which means in the coming years, we could see Black investors meeting, and perhaps surpassing, their white counterparts.
Hopeful but Hesitant
While these signs of life in the stock market seem promising, Black investors are more prone to invest in higher-risk stocks and stocks they heard about on social media. While Black youth and families are investing, education is still needed to make smart decisions, wise choices, and invest their money with the goal of not making a quick buck, but propagating wealth for the future.
By making snap decisions and not considering a long-term goal, Black investors might actually be harming their chances for generational wealth rather than helping them.
While Blacks are closing the investment gap, they are also twice as likely to invest in cryptocurrency, such as Bitcoin or Dogecoin, and that is due to investment platforms like Coinbase which makes it easy to do so. For more information about Coinbase, you can read our blogs on this investment platform here and here.
Coinbase is popular due to its cheap starting price of only $25. It also comes with a debit card that’s branded by Visa which allows you to make purchases from your investment account as you would with a credit card or your bank account’s debit card. This seems like an amazing perk but be warned, having direct access to your investment dollars will not help you build wealth because you are spending it.
All in all, it is an amazing sight to see Black investors finally closing the wealth gap and taking a bite out of the stock market. In the coming years, we could see Black investors surge above and beyond white investors and be free from poverty once and for all.
To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.