Stocks are soaring, and most Black people are missing out

“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. Toward that end, industry groups are trying to encourage more Black people to become financial planners, who could then draw in potential investors.The differences in stock ownership between white and Black households go back decades, and they narrowed a bit between 2016 and 2019, the most recent data available from the Federal Reserve. “One person sitting in the audience said, ’That’s all fine and wonderful, but this is all for white folks,’” he said.Malcolm Ethridge, a financial adviser in the Washington area, regularly sees a reluctance to invest in stocks among Black people with enough money to do so, such as tech executives, attorneys and people who inherited rental properties.“My personal opinion is Black Americans tend not to trust things that are not tangible because of our history in this country and things being taken away,” Ethridge said. “It gets passed on to you from generation to generation: to only trust and believe in things you can actually touch.”“A house, I can put my hands on that and believe in that, whereas a stock is just whatever someone else tells me it’s worth, and I just have to take your word for it.” Bob Marshall, a banking executive in northern Virginia who is Black and does invest in stocks, said differences in financial literacy education may be one factor in the racial disparity in stock ownership rates. Those kinds of stories don’t happen in Black communities.” Rogers had a different experience because of a conversation his father had with a friend, a white lawyer, about why African Americans didn’t invest in stocks.