Thanks to the historic stock market rebound from pandemic lows, affluent 401(k)-holders and savvy investors in the U.S. enjoyed double-digit returns from stocks over the past two years. But not for the majority of Black Americans.
Only 34% of Black American households owned equity investments, compared to 61% of white families, according to Federal Reserve Board's most recent survey in 2019. The average value of stocks Black Americans owned only amounted to $14,400, nearly a quarter of what their white peers held, the data said.
«Because Black households are less likely to be invested in the stock market and on every level less likely to be engaged in the financial system, they not only entered the pandemic with large gaps, the likelihood is that we are going to see some of these gaps widen coming out of the pandemic,» said John Lettieri, the Economic Innovation Group's president and CEO.
The primary way that Americans build wealth and invest is through retirement plans, and there have been enormous disparities between Black and white Americans on that front. Many Black Americans missed out on the hefty gains from the stock market because they often hold occupations where employers are unlikely to offer an employer-sponsored retirement plan.
Only 44% of Black Americans have retirement savings accounts, with a typical balance of around $20,000, compared to 65% of white Americans, who have an average balance of $50,000, according to the Federal Reserve.
«If you have access to a wealth management plan, what's happened in the last two years has been a boom to your bottom-line wealth,» Lettieri said.
The stock market pulled off a stunning recovery rally from the pandemic lows in March 2020, with the S&P 500 enjoying the
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