Welcome back to closing bell here on twitter news. So how is the pandemic
cryptocurrencies and market volatility affecting investors
and their approach to the market?
Well, Ariel investments in Charles Schwab just published
their annual 2022 black investors survey. And there's a lot to say between black
and white investors
joining us now is kelly,
johnson portfolio strategist at Charles Schwab and kelli white
investor activity is at an all time low.
Why is that? How does it compare to black investor activity?
Good afternoon, ken.
And that that was a surprising trend
that um,
that we had in the survey.
So, um first of all,
one of the commonalities that we saw between black and white
investors in this survey was that trust was a major factor
and trust has been trending down in terms of trust in the stock market
and also
just trust in the financial industry in general.
And so that that's led to the numbers. Especially, you know, if you look at 2015
White um investor involvement being 86% trending all the
way down to 63% this year in 2022.
So I trust has become a big issue
now when it comes to this trend, are we going to see this,
go on the same way or do you think activity
is going to increase for black and white investors?
Well, the interesting thing is if you step back and and analyze the data,
which we've done
a lot of the trends. We've seen our
affected by the overall environment that we're in the in
the economy and the markets and also social trends.
So for example
we've seen an uptick in black investors in E. S. G. Investing.
Um We've seen an uptick in crypto investing.
And in general we've seen some of the behaviors within black investors mirror some
of the behaviors we've seen in terms of more aggressive investing meme stocks,
N.
F. T. S. Things of that nature.
What's the reason behind why are black investors
more interested in crypto and these riskier plays?
Yeah it's um it's funny you asked that because I
had a long conversation over thanksgiving dinner with my son.
You could frame it as a three hour argument or a three hour discussion.
But essentially it the discussion
divided along generational lines which you'll typically see and I'm using it as
an illustration that that I think reflects what came out of the data.
So first of all
there's the lack of trust, I'll tie it into that.
And essentially there are a lot of christo crypto investors, be they black or white
they're there because they don't trust the U. S. Dollar.
They don't trust the stock market. They don't trust
the government in general.
And so crypto is is a way of taking control of that as it is a decentralized asset.
The the other element of our discussion was around
the idea that essentially older folks such as
myself don't know what we're talking about.
And so what we saw in our data
and I think this is fairly predictable
Essentially that people under 40, be they black or white.
We're much more aggressive investors in terms of
investing in things that they don't necessarily understand,
that they admit that they don't understand.
And also things such as crypto and N. F. T. S.
So it that trend tended to be linear.
And um in terms of the younger they are, the more heavily invested they were
kelly, you seem like a hip guy.
So I think, and you know what you're talking about,
but I have to ask for those who don't know kelly.
What kind of education does your company offer to make sure that people
perhaps get a better understanding about what they want to or our investigation?
Well, um, at Schwab in particular,
but also a lot of other companies around the industry,
there's a lot of emphasis in particular on investing the general society,
but also focusing on black investors.
And that's one of the reasons we did this survey.
You know, it's one thing for people like me to,
to think that certain behaviors are out there and
it's another to actually go out and get data.
And so we've, we've gotten our arms around this data.
We've been doing this survey with Ariel investments for 24 years.
And what we've seen over time
is that these issues, such as people being
invested more conservatively than they otherwise should
be because they're afraid of losing money
not under investing because they don't trust
the financial industry
and for african americans in particular
feeling a lot like this industry isn't for us
or these investments offer us that someone else's thing.
Now,
my last question to you is because something that the kids do trust the social media,
like the tick talks and
the Reddit ear's and these content makers.
So what advice do you have for those retail investors or perhaps any investor?
Younger ones who are looking to Tiktok and Reddit to get there?
I guess investment education rather than
looking at the more traditional approach.
What advice do you have for them?
Sure. And this, this is an area where we have to,
we have to
except that this is the modern way of doing things
and basically make the best of it.
So what I mean by that specifically is it's fantastic that younger and younger
folks are getting involved in investing and are interested in it by any means,
would be it, um,
be it by using crypto or or using social media.
And our job behind that is to make sure that once they, once they engage,
once they become interested
than to be there to provide education for them.
And one of the things we've been doing is things such as online investing,
we've been actually going out into the community around the
country and educating younger folks like teenagers about investing.
We, we we've trained volunteers that Schwab to do that.
And so we were working on several levels to
take advantage of this buzz that's out there.
I mean,
driven by things such as very famous actors and entertainers and athletes who
are openly advertising crypto and and openly promoting it on social media.
So instead of thinking that this is a bad idea,
we're trying to take advantage of it in terms of using that interest and that
passion and and and and providing a layer of education on top of that.
Love to hear it kelly johnson portfolio strategist at Charles, Schwab kelly,
absolute pleasure.
I hope you and your son worked it out
during that discussion, because I don't get heated kelly,
Thanks so much for being on the show.