The racial wealth gap in the US has widened since 1980, in part because white Americans invest a larger share of their wealth in the stock market compared to Black Americans. This column explores how differences in unemployment risk impact the investment choices of white versus Black Americans. Black Americans face significantly higher cyclical unemployment risks and, in recessions, disproportionately larger earnings losses. They may therefore rationally invest more cautiously to buffer the risks of income loss, which tends to exacerbate the racial wealth gap. Labour market inequalities may need to be addressed to foster more equitable financial participation and wealth accumulation among Black Americans.