A higher number of Black, Hispanic, and Latina women are incorporating investing strategies in an effort to grow wealth, finds new research from J.P. Morgan Wealth Management.
The firm’s latest Diverse Investor Study found that 51% of Hispanic and Latina women respondents and 46% of Black women respondents began investing outside of an employer-sponsored retirement plan less than five years ago, compared to 24% of all respondents. Seventy-four percent of Hispanic and Latina women and 69% of Black women credited building generational wealth as their motivation to start investing.
Black women were also likelier to show their support for women-led investments. According to findings, 59% of Black women investors said it’s important that the companies their investing in be women-owned—twice as high as investors surveyed overall (28%).
“Money brings independence,” said Kristin Lemkau, CEO of J.P. Morgan Wealth Management. “Consistently women, and in particular diverse women, are motivated to build wealth to create more opportunities for their children and families. They understand in a time of changing markets that saving isn’t enough. They also need to invest to have their money make money.”
In fact, a greater number of Black, Hispanic, and Latino investors are taking a hands-on approach to their finances compared to previous generations. This was especially true for younger investors. According to J.P. Morgan, more than half of younger investors in these groups would rather take an active role in selecting stocks, bonds, or index funds that comprise their portfolio, compared to 45% of Black Gen Xers and Baby Boomers, 46% of Hispanic and Latino Gen Xers, and 37% of Hispanic and Latino Boomers.
On a gender scale, women were less likely to take a risky approach to investing compared to men. Seventy-seven percent of women described their investing strategy as risk-averse, compared to 58% of men, and only 22% of women described their investment strategy as risk-taking, whereas 41% of men do.
Women were also likelier to be more passive in their investments. J.P. Morgan found that 50% of male investors take an active approach in selecting the stocks, bonds and funds that make up their portfolio, compared to 38% of women. Men are also more likely to follow how the market is impacting their personal finances, which on the other hand, can lead to emotional reactions in response to volatility, the firm reported. Most of women investors surveyed admitted not paying much attention to how the market impacts their personal finances, compared to 41% of male investors.
The J.P. Morgan Wealth Management 2024 Diverse Investor Study is based on a sample of 1,069 American adults over age 25 with at least $25,000 in investable assets, including oversamples for Black, Hispanic and Latino Americans (399 White respondents, 301 Black respondents and 321 Hispanic and Latino respondents).
More information about the study can be found here.