Originally created 07/09/01

Blacks seek investment equality



ETTRICK, Va. - The sun is shining and the backyard barbecue smoking, but the 16 men crowded into a suburban living room on a Saturday afternoon aren't there to watch a ballgame.

They're caught up in the sport of making money.

"For Lucent to go back up to the $42 we bought it at, it has to go up to over 500 percent," pointed out Will Huggins, who wants to sell the 151 shares of Lucent Technologies Inc. owned by the Expectation Investment Club.

What's notable about this club isn't its investment style - it decided to hold Lucent for more research - but its membership: all men and all of them black. The group is one example of growing efforts by black Americans to get involved in the stock market.

"The level of interest in financial independence, economic empowerment and investing has just exploded," said Duane Davis, the founder of the Coalition of Black Investors.

They're trying to cut the gap between black and white investment levels. A survey by Ariel Mutual Funds and Charles Schwab & Co. showed stock ownership for 80 percent of whites earning more than $50,000 a year, while the figure was about 69 percent for blacks in the same income group.

"African Americans also tend to buy lower-risk assets than whites," said Lisa Keister, a sociology professor at Ohio State University. "They tend to be less likely to have stocks, mutual funds, bonds and even things like checking and savings accounts."

Explanations for the gap vary, but many experts agree that education, income and wealth disparities are key factors.

The investment industry has made some effort to attract blacks. It's no longer unusual to see black actors in commercials or black publications with ads targeting investments.

Invest for Success workshops are being held across the country by the National Urban League, Coalition of Black Investors and Investment Company Institute, a mutual fund trade association. The educational sessions combine the ICI's investment expertise and the Urban League's and Coalition's status in the black community.

"All of my adult life I've wanted to find this kind of information," said Eleanor Martin, a billing manager who attended a recent Invest for Success workshop in New York.

Still, many blacks say investing independently remains an unfamiliar concept.

"Most of us did not grow up discussing this around the dinner table," said Deborah Frazier, a black financial planner for Merrill Lynch in Edison, N.J. "There is some catching up to do here."

She's hopeful that the emphasis on investor education will help future generations bridge the investment gap - a goal shared by many black investors.