Creating more black investors goal of seminar here Thursday

Lack of familiarity with equities called obstacle to affluence


The number of African-Americans investing in stocks has grown recent years, but more need to participate in the market to secure a comfortable retirement, some financial experts say.

To that end, the Baltimore Urban League, the National Urban League, the Investment Company Institute Education Foundation and others are sponsoring a free personal finance seminar Thursday in Baltimore. The seminar is to cover investment basics such as setting goals, dollar-cost averaging, diversification and developing realistic expectations.

The program, which offers workshops In various cities, was created about a year ago after the release of a 1999 survey that found African-Americans were less likely to invest in the stock market than were whites with similar Incomes, sald Derede McAlpin, director of public information with ICI in Washington.

The prime reason many African-Americans shy away from stocks is lack of familiarity with them, McAlpin said.

Brokerage Charles Schwab & Co. and Ariel Mutual Funds, the largest mutual fund company in the country owned by African-Americans, conduct the survey annually by polling black and white households with incomes of at least $50,000.

In 1998, the survey found that 57 percent of African-Americans polled said they owned stocks, compared with 81 percent of whites. Two years later, 64 percent of African-Americans owned stocks vs. 82 percent of whites.

"We are moving in the right direction. We still have a long way to go," said Melody Hobson, president of Ariel Capital Management/Ariel Mutual Funds in Chicago.

Hobson said African-Americans generally did not learn about stocks from family members when growing up. Many received their first exposure to stocks through a 401(k) plan at work, she said.

There is also a level of distrust among African-Americans about the stock market, Hobson said.

"Just because we have so little exposure and the industry is not very diverse, we don't trust the stock market or the people we hear talking about it. We don't feel we know these people," she said.

Risks of playing it safe

African-Americans also tended to be more conservative investors, often favoring real estate and insurance over stocks that traditionally produce the higher returns over the long haul. Being too conservative can lessen returns and have huge negative consequences in retirement, Hobson said.

The Baltimore program comes at a time when stock prices are depressed and the market is volatile, but McAlpin said this is a good time for the seminar.

"People should have realistic expectations about the market and fluctuations," she said.

Jackson to run program

The Baltimore "Investing for Success" program will be conducted by Stephon Jackson, vice president and portfolio manager with Brown Capital Management, an African American-owned investment firm with $6 billion in assets under management.

The seminar will be held Thursday at the Radisson Plaza Hotel (recently renamed from Baltimore Hilton & Towers), 20W. Baltimore St. Registration begins at 6 p.m., and the program starts at 6:30 p.m.

For more information about the seminar or to sign up for it, call 1- 877-358-5888.

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