Early this year, we watched a group of retail investors use their buying power to drive GameStop and AMC’s values up by billions — all because individuals wanted to support the brands they love. Reports of the event and the “squeezes” that followed tell us that much of the American public sees our financial systems as a battle between “individuals vs institutions”. But this is a ‘battle’ that doesn’t need to be waged. Consumers have every right to participate in and hopefully profit from America’s primary wealth-builder, and they’re showing up to do just that. Welcome to the ownership economy.
Amidst the memes and media hype that have followed, there is a core, fundamental truth of the stock market being called into light: Everyday consumers can win when they own a piece of it. Brands can win when they make their customers a part of their story.
This truth was part of the founding principles of the stock market 229 years ago — when 24 merchants and stockbrokers established the parameters for trading on Wall Street with The Buttonwood Agreement. They agreed, not just on how to trade with one another, but that they would represent the interests of the public, a principle that today is protected by well-known regulatory entities.
The historical significance of this institution is never lost on me, and has driven my personal mission to create access to ownership, along with the education to make informed decisions about investing. I believe this moment is a harbinger of things to come. As the wealth divide in America grows, people want greater access and inclusivity. However, to see lasting, impactful results, consumers need access to ownership more than short-term day trading. There needs to be trust between everyday Americans and the financial institutions they are stepping into.
With the tumultuous nature of the 2020 American economy, where does that trust stand? While we know that the stock market is not the economy (nor vice versa), the glaring contrast of robust stock market returns in the midst of record-breaking unemployment made it abundantly clear to the general population: we all contribute to our collective financial markets, but the vast majority of us don’t yet benefit from them.
Most Americans own little or no stock, whereas the wealthiest 10% of Americans control 88% of stocks.
Those disparities become even more apparent when we look at the communities who are impacted by long-institutionalized marginalization. Only 1.2% of the stock market is held by Black families and just 0.5% is held by Hispanic families. The same communities that have been disproportionately impacted by the COVID-19 pandemic are even less likely to benefit from the recovery of our financial system, much less our nation’s largest wealth builder — the stock market.
And, here we are — at a moment in time when that balance is starting to shift and the opportunity for retail investors is clear. My greatest hope is that we leverage this moment in time to build understanding, build access points to the market, and ultimately bridge the gap between the individuals and the institution.
The power of individual consumers is what gives companies — from movie theatres to gaming stores and beyond — the opportunity to be here (and in the future) despite the hardships that COVID created. These retail investors are coming into their voice and their power and it’s up to the brands to lean into this opportunity to give back to their customers, to see the value in creating owners, and to say “thank you for loving our brand into existence. It’s time that we love you back.”
I believe that the brands that forge these relationships and believe in the power of making their customers owners are the brands whose stories will extend into the next decade. The ownership economy is here. Let’s commit to creating more access. More owners. More inclusion. More education. More recognition that we all contribute to the economy — and it’s time we all have the opportunities to benefit from it.
David Nelsen is a two-time fintech entrepreneur, currently CEO and Founder of Bumped — the tech company and app that rewards consumers in fractional shares of stock when they spend with their favorite brands.