this cooperative thrust, form investment clubs or participate in those connected to your employee association, social or professional organization, or church. For example, churches such as New York’s Allen AME have set up scores of investment ministries that have invested in equities and have produced better returns than some growth-stock mutual funds. The benefit: members are generating money for their families and their community at the same time. Others have used such vehicles to fund businesses and support nonprofits as well. As government funds for small businesses and community development continue to be scarce, it will be up to African Americans to use such methods to shore up our communities.
Moreover, investing will be used to propel our diversity agenda as well. Jesse Jackson’s Wall Street Project and the NAACP’s economic reciprocity campaigns have gained leverage by having members buy shares in targeted companies. For example, NAACP CEO Kweisi Mfume bought shares of News Corp., Time Warner, Disney, CBS, and General Electric when he pushed for diversity in network television programming. By doing so, he was able to obtain internal documents on the companies’ hiring practices and be heard at shareholders’ meetings. The result: the networks began to diversify their programs.
The main objective of building wealth is to provide options for you and your family — to own property, to secure a quality education for your children, to build viable black-owned businesses, and to create lasting institutions. In the 21st century, African Americans should seek full access and participation in the American Dream. We are deserving of nothing less.
C. Kim Goodwin, Senior Portfolio Manager, American Century Growth Fund On Investing And Taking Risk To Build Wealth
I believe we are going to continue to see positive developments in the equity market. Because of demographic trends, I believe the market will accelerate to at least a 15% return on an annual basis over the next decade. We will continue to see more and more individuals take control of their financial future. Just a few years ago, the employer invested on the behalf of the employee, and that investment was the employer’s company stock; 401(k) programs and similar vehicles will give individuals more investment options today and in the future.
I can’t tell you how many times I meet professionals who tell me that they finally get it: “I have to get my money to work for me.” They have good jobs, work hard, and provide for their families. If they don’t invest, they won’t have a chance to build wealth. But many African Americans are still conservative and place their hard-earned dollars in a CD earning 5%. Or some will save, then take those dollars and spend them on a big vacation or more expensive car. When we consider purchases, we should look at what the value of those dollars will be five years from now.
You will have to be willing to take risks, and, yes, buying stocks requires taking a risk. I believe in taking risks and remain bullish on the equity markets.