Mellody: There are definitely other factors at play here, Tom, with the big ones being income, education and age. The survey found that African-Americans with higher incomes and higher levels of education have a greater propensity to invest. Of the African-Americans making between $50,000 and $100,000 per year in household income, 57% were investors.

But that rate jumped to 81% for those making over $100,000 in household income. Similarly, Blacks with a graduate degree have a 72% participation rate, as compared to college graduates and below who participate at a rate of 63%. Finally, the millennial generation is showing significant progress, as Black and white millennials are investing at about the same rate. Obviously, the income and educational gap that exists between blacks and whites has ripple effects into savings and investment strategies, but the younger generation may be remedying it to some extent.

Beyond this there are two additional factors. First, the prominent role that real estate has played in the saving and investment strategies of African-Americans. And second, higher perception of risk and unfairness in the stock market that exist among our community. But there is good news. This most recent study shows signs that this may be shifting. The percentage of Blacks citing real estate as the “best investment overall” dropped from 61% in 2004 to 37% now. Meanwhile, the feeling that the stock market is the best investment has grown, from 28% in 2004, to 41% this year. These trends, while gradual, are important.

Tom: We are seeing a shift in perceptions around investing. How do black folks feel about the economy in general?

Mellody: This was very interesting. Compared to whites, African-Americans are significantly more optimistic about the economy. Compared to whites, African-Americans are more likely to feel hopeful about the current U.S. economy (75% vs. 50%), feel bullish about the stock market (65% vs. 53%), and believe the outlook is good for the next generation to achieve the American dream (37% vs. 21%). That is not to say there was not some anxiety – nearly six in ten African-Americans (compared to about a third of whites) feel that racism impacts fair opportunity for all – but given the recent events that have impacted our communities across the country, Black people are incredibly optimistic about our future.

Tom: Given these findings, how do you feel about the future for Black investors?

Mellody: It is clear that access to employer retirement plans represent the “golden door” for Americans to access the investment opportunity of the stock market, and our research bears this out.  This is true for all, but especially African-Americans. Why? Because shifting attitudes toward the stock market and optimistic outlooks do not actually get people invested in the market. Workplace retirement plans do. So if you have access to one, take advantage of it. If you know someone who isn’t, try to talk some sense into them. Hopefully, programs like MyRA and others will broaden access for potential investors, because it is critical for retirement.

Tom: You are absolutely right. Thanks for sharing this with all of us here on the Tom Joyner show first, mellody!

 Mellody: You are very welcome, Tom. Have a great day!

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Money Mondays: The State Of The Black Investor 2016  was originally published on

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