The Academy of Financial Services 35th Annual Meeting

New investors, race, ethnicity, gender

2020 saw a surge of new investors enter the market, but little is known about how this group differs from more tenured investors.  To learn more about these new account openers, their motivations, the types of accounts they opened, and their investment knowledge and practices, we surveyed 1,291 households, including 460 new investors who began investing with taxable accounts for the first time in 2020, from a nationally representative, probability-based panel.

This paper details the characteristics of new investors, with a special focus on differences based on race, ethnicity and gender.  Results of this study indicate that new investors were younger, had lower incomes, and were more racially diverse than investors who entered the market prior to 2020. New Investors held smaller balances in their taxable accounts and reported different goals, motivations, and information sources when compared to more tenured investors.