Abstract
We study the behavior of minorities over the 2007-09 period. We find that, despite the Great Recession, post-2008 and compared to white Americans, minorities have a higher propensity to increase risk tolerance, optimism, and allocations to risky assets and lower probability of exiting the stock market. These findings cannot be explained by changes in wealth or income and we ascribe them to the positive effects of the election of President Obama who is a role model for minorities. Overall, increased visibility of minority role models may encourage investing in risk assets by minorities and potentially alleviate the racial wealth gap.
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