Politics

13 Things to Know About Black American Investors


When it comes to investing, young Black Americans are make a major impact over the years, particularly in the realm of cryptocurrency, where they are showing a higher interest than their white counterparts. A recent study from the 2022 Ariel-Schwab Black Investor Survey reveals a growing appetite for higher-risk investments like digital currencies among Black investors, particularly those under 40, according to T. Rowe Price.

Here are 13 things to know about Black-American investors.

1. Surge In Cryptocurrency Ownership

Some 25 percent of Black Americans now own cryptocurrency, a much higher percentage than their white counterparts, only 15 percent of whom hold digital assets. Among Black investors under 40, this figure has recently increased to 38 percent, compared to 29 percent for young white investors.

2. Black Investors Under 40 Are Leading The Charge

About 38 percent of Black investors under 40 own cryptocurrency, which surpasses the 29 percent of young white investors in the same age group. This reflects a growing trend of younger Black Americans embracing emerging financial technologies.

3. Cryptocurrency Viewed As ‘Best Investment‘ By Black Americans

Eight percent of Black Americans believe cryptocurrency is the best investment choice overall, double the percentage of white Americans (4 percent) who share this view.

4. Younger Black Investors Are More Likely To Take Risks

Some 23 percent of Black investors under 40 made their first investment in higher-risk assets like cryptocurrency.

5. Social Media Is a Key Investment Information Source

Thirty-three percent of Black investors have made investment decisions based on what they saw on social media, more than twice the rate of white investors (20 percent). Among younger Black investors, this reliance on social media for financial advice increases even more to 51 percent.

6. ‘Get Rich Quick’ Mentality Is Prominent

The 2022 Ariel-Schwab Black Investor Survey found that 23 percent of Black investors cited excitement about cryptocurrency as the main reason they started investing. This enthusiasm is part of a broader trend where many first-time investors are drawn to the market by the allure of quick returns.

7. Black Investors Are Less Risk-Averse Than White Investors

Despite the volatility of cryptocurrencies, 68 percent of Black investors view them as a safe investment, compared to just 33 percent of white investors who hold the same opinion, AfroTech reported.

8. Black Americans Are Less Trusting Of The Stock Market

The 2022 Ariel-Schwab Black Investor Survey survey revealed that 30 percent of Black Americans are less trusting of the stock market compared to 23 percent of white Americans.

9. Financial Education Gaps Persist

There is a noticeable lack of education among investors, with 47 percent of Black investors saying they’ve invested in sectors they don’t fully understand. Some 45 percent of white investors revealed the same.

10. Cryptocurrency Continues To Attract Younger Investors

Twenty-three percent of Black investors under 40 are excited by the prospect of cryptocurrency, while only 11 percent of white investors in the same age group feel similarly.

11. Distrust in Traditional Financial Institutions

It was found that 28 percent of Black Americans don’t trust traditional financial institutions, compared to 18 percent of white Americans. This distrust has led many Black investors to consider unconventional investment options, such as digital currencies.

12. The Role Of Financial Advisors

Both Mellody Hobson and Carrie Schwab-Pomerantz of Ariel Investments pointed out in the 2022 Ariel-Schwab Black Investor Survey the importance of financial education and working with a financial planner to help mitigate the risks associated with high-volatility investments like cryptocurrency, according to Black Enterprise. Hobson highlighted the dangers of sacrificing long-term financial goals for short-term gains.

13. Historic Low Stock Market Participation

Despite these trends, overall participation in the stock market remains historically low, with just 58 percent of Black Americans owning stocks, a drop from 74 percent in 2002.



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