Black, Hispanic investors younger, more open to risk: Report

investmentnews.com:

While minority investors are entering the retail investing market at a faster pace than whites, they’re also behaving more like younger investors when it comes to investing.

That includes relying on social media for investment information and trading risky investments such as cryptocurrencies and meme stocks, according to a report, Investors of Color in the United States, compiled by the Finra Investor Education Foundation.

The new investors, particularly those who are Black and Hispanic, tend to be much younger than white investors, according to Finra.

And similar to other younger investors, Black and Hispanic investors are more likely to engage in risky investments such as meme stocks, cryptocurrencies, and options, according to the report, which was issued last month and is based on based on data from the Finra Foundation’s National Financial Capability Study, along with a series of focus groups conducted with young African American, Latino and Asian American investors.

A common wisdom in the retail investing industry is that younger clients, many of whom have not yet been burned by a market correction, have a much higher appetite for big risks than their gray-haired counterparts.

In both the survey and focus groups, respondents were required to be investors – holding securities investments in non-retirement accounts – and not just saving for retirement, according to Finra.

Minority investors are a growing portion of the U.S. retail securities market, according to the report. Compared to 2015, there was an increase of 9 percentage points in the portion of Black respondents who are investors, an increase of 6 percentage points among Hispanic respondents, and a rise of 7 percentage points among Asian Americans. In