Under contract with the Investor Education Foundation at the Financial Industry Regulatory Authority (FINRA), NORC at the University of Chicago conducted a series of studies to identify the relationship between the COVID-19 pandemic-related stock-market volatility and investment perceptions among African American, Hispanic/Latino, and white households with and without investment accounts.

Investment behavior differences among African American, Hispanic/Latino, and white consumers are well researched. In general, African American and Hispanic/Latino individuals own stock less frequently than otherwise similar white individuals. These differences are likely due to differences in demographic and financial characteristics but are also potentially related to differences in financial attitudes, such as risk tolerance. To examine differences in response to market volatility based on race and ethnicity, NORC oversampled African American and Hispanic/Latino panelists to obtain adequate data for analysis.

Results of this study indicate that both African American and Hispanic/Latino respondents were less aware of the pandemic-related market volatility, regardless of investor status or investment knowledge. While expectations related to market recovery were generally optimistic among white respondents, Hispanic/Latino and African American respondents indicated less optimistic recovery timelines and more uncertainty around how the value of the stock market in general and their personal portfolios, might recover. Despite this pessimism, African American and Hispanic/Latino investors with taxable accounts and those with high investment knowledge were twice as likely as white respondents to report increased interest in investing in the wake of pandemic-related market volatility. African American, Hispanic/Latino, and white respondents did not differ in whether they thought U.S. financial markets were fair to the average investor, although perceptions of market fairness were low among all respondents.