According to an annual report/survey done by Ariel Investors and Charles Schwab, the investing gap between Black and White investors is the narrowest it’s ever been since the study started in 1998. This is fantastic news!! But let’s unpack this to learn why and see if this trend is here to stay. 

According to the study, the main reasons that Black investor numbers have increased while White investor numbers have decreased is:

• The Rise of Cryptocurrency
• Younger Audiences (68% of Black investors are under 40)
• Social Media Influence

⅓ of Black investors reported that they invested based on a post from social media. Though social media influence has positively grown the total number of Black investors in the market, the lack of education has caused a lot of money to be eaten by volatility and could have a long-term negative impact on wealth generation. It’s critical we meet younger audiences where they are and combat the misinformation and misconceptions of investing. 

Historically, the main reasons that investors have exited the stock market or have never invested in the first place is that they are afraid to lose money, feel the stock market is too risky, don’t know where to start, or feel they need easier access to their money.  It’s great to see momentum building these past few years, but if not harnessed properly could end up being more detrimental in the long-run. Crypto in particular has had a lot of wins as many people have made money quickly in the bull market, but lost quite a bit as well this past year. Investors need to be focused on the long-game, not short-term performance.

As a young Black investor, I understand the fears that investors are facing in this current market. However, the best time to invest is now. Playing the long game within the stock market consists of decades of dollar cost averaging and staying current on the fundamental analysis of the companies you invest in. Speaking for myself, if my dollars are going to sit in the market for decades, I want them to be impactful and support companies focused on fighting climate change, actively addressing racial and gender disparities, and uplifting underserved communities.

Raeonna Jefferson

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