For generations, statistics have shown that Black Americans have been apprehensive about getting involved in the stock market, whether it be because of disenfranchisement and/or cultural stigmas. However, with the advent of the internet, simpler means to start investing, and more access to financial literacy, more Black Americans are investing.
In fact, about 67% of Black Americans with incomes of at least $50,000 have money invested in stocks or stock mutual funds as of 2016, according to a 2017 report from McKinsey.
In 2020, a record amount of Black people became first-time investors, most of whom were under 40, a recent survey found.
As the stats above show, the investment gap between Black and white Americans is closing, and you can also be part of that trend. Here are some resources to help you get started:
U.S. News Money
One thing you need to understand as an investor is that there's always risk involved. The key is to minimize that risk, so it's best to be well-informed about investing before hopping in.
U.S. News Money has a helpful article outlining the basics behind stock market investments, from terms you may not be familiar with to tips and tricks.
Investment apps for beginners
You may have heard investment apps like Robinhood in the news due to the GameStop stock buying craze that originated from Reddit. That's because platforms like Robinhood make it easy for people to manage their stocks from your smartphone. They're far from the only ones on the market, too. Many sources praise apps like SoFi, ExTrade, and Acorns since most of them don't require you to have money to start investing. In fact, some of them may provide bonuses when you sign up.
Check out NerdWallet's list for the best recommendations.
Building a portfolio
Most investors don't just invest in one or two companies -- they have stocks in several different companies. This is called your investment portfolio, and experts recommend having a diverse portfolio to maximize investments and minimize risk. Your portfolio isn't just isolated to stocks. It also includes bonds, mutual funds, and other assets like a 401(k).
NerdWallet outlines what goes into an investment portfolio and how you can start off strong.
The U.S. Securities & Exchange Commission
We saved this one for last since it mentions some complex topics, like dollar-cost averaging. They also mention leveraging benefits and "free money" from your employer. Since it's a U.S. government agency, they also outline your protections and rights as an investor. You can read more here. They also have a fact sheet of things every investor should know, including what's illegal and what's not.
Even though this is a lot of information and may seem intimidating, it gets easier with time. Better to be safe than sorry, especially when it comes to your hard-earned money!