Does a $15,000 grand tour of the U.S., including Alaska, sound like fun? Howard Johnson of Ellenwood, Ga., and his wife, Jackie, pulled funds from their stock portfolio to finance the extended vacation last year.
Howard told the newspaper he’s concerned that too many black investors are missing the chance to lock in their financial security and even become rich by investing in the stock market. And statistics quoted in the article show he’s right.
“I think a lot of it is a lack of understanding of how the market works,” Howard said.
The newspaper outlines a 2012 study by FINRA underscoring his concerns:
“Even when investors of different races have the same incomes and education levels, black and Hispanic investors are still less likely to take the plunge into serious investing, the FINRA study noted. In that case, black households were about 7 percent less likely to own taxable investments than white households. Hispanic families were about 4 percent less likely.”
The taxable investments were those held outside of an independent retirement account or employer-sponsored 401(k). Asian and white households were far likelier to hold taxable portfolios.
Charles Lemon of Jonesboro, Ga., doesn’t dispute FINRA’s report showing that blacks aren’t as inclined to buy equities. But he told the Journal-Constitution that he sees evidence that in recent decades African-Americans have made strides in using stocks to grow their wealth.
Charles belongs to a BetterInvesting investment club called the Infinite Investors. Members are friends and co-workers.
“I come from a generation where my grandparents didn’t have a bank account,” Charles told the newspaper. “We are the first generation to get into investments.”
And Howard is working to close the gap, the newspaper said. He and cousin started a 16-member family investment club several years ago for their children, nieces and nephews. About half the online club’s members are in their 20s and 30s. The elders counsel the younger members to invest as much as possible in 401(k)s, set aside emergency funds and to stick to long-term investing goals — no matter how the stock market is doing.
“This is one of my passions,” Howard told The Atlanta Journal-Constitution. “I tell them to treat it very seriously.”
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was borne out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at www.betterinvesting.org or call toll free (877) 275-6242.