USA Today had a piece discussing lower rates of minority enrollment in 401(k) plans. It also notes that minorities are also less likely to put their money in stock and instead prefer safe bond and money market funds. The article suggests giving them more financial education. In fact, the financial educators were utterly clueless over the last decade. They were too uneducated to recognize the stock bubble or the housing bubble. Their advice to hold most of a portfolio in stock would have led to large losses for minorities compared with their strategy of holding relatively safe assets. Unless the financial educators are smarter in the future than they were in the past, it is not clear that we should want them to talk to minority investors or anyone else.
--Dean Baker
