Stocks are soaring, and most Black people are missing out
NEW YORK (AP) — Americans who own stocks are pulling further away from those who don’t, as Wall Street roars back to record heights while much of the economy struggles. And Black households are much more likely to be in that not-as-fortunate group that isn’t in the stock market.
Only 33.5% of Black households owned stocks in 2019, according to data released recently by the Federal Reserve. Among white households, nearly 61% did so. Hispanic and other minority households also are less likely than white families to own stock.
Many reasons are behind the split. Experts say chief among them is a longstanding preference by many Black investors for safer places to put their money — the legacy, some say, of decades of discrimination and fear. Also, many were never taught what they were missing out on.
“We didn’t have a grandfather or aunt or uncle or mom and dad educating us on the markets because they didn’t benefit from it because of historical discrimination in this country,” said John Rogers, founder and co-CEO of Ariel Investments.
Black people have also often lacked the opportunity to build up wealth, park it in the market and watch it grow over time. In general, they have lower incomes, which leaves less money to invest after paying bills. Many also work jobs that don’t offer retirement plans like a 401(k).
But researchers say that even wealthier Black households are much less likely to own stocks than their white counterparts. That means they missed out on the roughly 260% returns for S&P 500 funds over the last decade, and the resulting chance to see their wealth grow.
Lower rates of stock ownership are a small reason for the wealth gap between Black and white families. The most important may be the restricted access Black borrowers had to mortgages and affordable housing through decades of...
