Stock markets intimidate a lot of people. People may think the stock market is out of reach and is maybe only for the wealthiest few. There is certainly some merit to this. Rich people in the United States tend to have the majority of their wealth inequities. Whereas the bottom 50% of households in terms of wealth tend to hold the majority of their wealth in real estate assets, namely probably their primary home, the rich tend to have their holdings in stocks.

There’s a lot of misconceptions out there about stock markets. The jargon can seem a little more intelligible than Greek, and there’s a lot that can make you want to run for the door rather than fork out your hard-earned dollars to gain a partial stake in the future earnings of a business you may or may not know a lot about.  Then there is also the fact that one of the main things, financially speaking, that distinguishes the rich from the poor is that they have a lot more of their assets in stocks than their less fortunate brothers and sisters. Like more than 15 times as much on a proportional basis. So, there’s genuinely something to these stocks, and if you’re looking to learn more, you’ve come to the right place.

The Perennial and Ultra-Modern Are Simultaneously At Home In The Stock Market

You may think stocks are the epitome of modernity with the flashy screens and complicated graphs you see being displayed. However, the equity asset class has origins that are centuries old and predate capitalism as we know it, despite now being one of the modern capitalist system’s pillars. The first publicly traded company was the Dutch East India Company, traded on the Amsterdam stock exchange. It began trading in 1602.

Before there was an established exchange dedicated to equity and debt, most of the transactions occurred in coffee houses. So if you’re sitting in Starbucks on the Wall Street Bets message board, you have more in common with the original stock market participants than you may think. Just as cafes were a hotbed of revolutionary political activity in France, they were the nexus of a blossoming innovation that would significantly improve society by connecting investors with instruments that can provide them with specified uses that help them manage risk and increase returns.

The first joint-stock company came about because people realized it made a lot more sense to fund multiple trade expeditions at once rather than one at a time. This idea to diversify risk and limit liability would eventually become enshrined in the corporate entity that has become such a cornerstone of modern capitalism.