U.S. Rep. Ritchie Torres penned a letter to SEC chair Gary Gensler with concerns about proposed rules changes for investments.
Photo courtesy Jacob Long
Investing in the stock market has never been easier. With zero-commission trading and phone-based investment apps, more and more young people and our Black and brown neighbors are taking control of their financial future, putting money into investment accounts, and improving their financial literacy. These steps are key to building generational wealth, boosting small business creation and improving the economic health of our communities. This expanded participation in financial markets, especially when it comes to lower income and first-time investors, has been a bright spot in otherwise dreary economic times.
While our leaders in government should celebrate these gains, there is much more to do to fully dismantle the structures that have long shut young people and our communities out of the stock market. But recent proposals by the Securities and Exchange Commission (SEC) to completely overhaul how stocks are bought and sold risk setting us back in this effort.
As recently as 2019, people without any expertise in investing made up just 10% of the stock market’s total trading activity. But during the pandemic, that share skyrocketed, with everyday investors making up 25% of the market in 2020 and close to 30% in 2021. Due to disparities in reliable internet connectivity, a high percentage of Black and Hispanic households are mobile device-only internet users. However, the rise of app-based investment platforms has opened doors for many who never had access to the stock market previously.
As technology continues to break down barriers for communities traditionally shut out of the market, a recent report found that new investors “were younger, had lower incomes, and were more racially diverse” than ever. But that won’t remain the case if the SEC moves forward with its proposed…
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