Investment Behavior: Factors that Impact African American Women’s Investment Behavior

The wealth of African Americans has lagged behind that of the general US population. The key to understanding this may lie in African American women’s money management abilities and feelings relating to money because they are often the household’s money manager. This study answers the question, “If African American women had greater confidence in their ability to manage money, or had a positive attitude towards money, would they invest in the stock market more often and ultimately increase their net worth in this way?” Researchers studied a cross-section of African American women, using three logistic regression models and found that African American women who were sure of their ability to manage their finances and felt in control of their money were more likely to be investors. A higher number of younger African American women were investors, compared to older African American women. In addition, younger African American women had greater confidence in their money management ability than their older counterparts.