Community Resources
Roadmap to Generational Wealth: Investments
What you need to know about Investments
To invest is to put money into assets with the goal of earning income or increasing their value over time. Stocks, bonds and mutual funds are common investments. Unlike cash savings, investments can lose value and returns are never guaranteed.
Access to investment markets is not equal. In the Federal Reserve's 2022 Survey of Consumer Finances, 39.2% of Black families owned stock, compared to 65.6% of White families.
Income, existing wealth, and the amount of money available after basic expenses can affect who is able to invest. The NAACP's Inclusive Economy agenda supports greater access to assets, savings, investments, and other wealth-building opportunities.
How to make informed investment decisions?
- DO decide what you are investing for and when you may need the money before choosing an investment.
- DO understand what you are buying, how it could make or lose money, and what risks come with it.
- DO spread your investments across different companies, industries, or asset types to reduce the risk of relying too heavily on one investment.
- DO compare expense ratios, advisory fees, account fees, and other costs because even small fees can reduce returns over time.
- DO check the registration and background of an investment professional before trusting them with your money or taking their advice.
- DO review your statements and investments regularly to make sure you recognize your holdings, fees, transactions, and account activity.
Don'ts:
- DON'T make an investment decision based only on a social media tip or a promise of high returns with little or no risk.
- DON'T use money you need for bills or emergencies to make risky investments that could lose value when you need the money.
- DON'T assume an investment is safe because it came from someone you trust. Affinity fraud specifically targets trust within racial, religious, professional, and other communities.
What policies should you fight for?
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