Black risk aversion is survival response to racism, not financial ignorance

Evidence

However, if there is any truth to the idea that risk aversion is a uniquely “black trait” when it comes to investments—a suggestion made by the critics who propose financial literacy as the solution—it’s a trait that has developed out of sheer necessity. Given the systemic racism and resulting setbacks faced by black Americans across the board—in marriage, homebuying, education, and the labor market, not to mention the school-to-prison pipeline, health disparities, and environmental racism—it seems to make more sense that we are more risk-averse than our white peers, including in our investment strategy. Black Americans have to be risk-averse because of the anti-black racism we face every day; often, our very survival depends on it. — Dorothy A. Brown, The Whiteness of Wealth, 462

Categorization

• XREF: Inverts the financial-literacy framing used against Black investors; parallel to the reader’s graft piece where systems, not user traits, need changing. Also an echo of the Frankfurt reading on how oppression produces traits then blames them. — connects to: Financial loss aversion outweighed racial solidarity in fleeing neighborhoods — Kevin M. Kruse, White Flight: Atlanta and the Making of…, 230