As we close out 2023, I’m reflecting on individual investing, and how far it’s come. Robinhood celebrates its 10th year this year. While I was not here in the early days, the company’s mission and focus are still very relevant.

It’s been a decade since the investing world started to change for everyone—and it was (over)due.

Similar to what I shared in an opinion piece for the World Economic Forum, according to the World Bank, for the 10 years prior to a decade ago, 2003-2013, the stock market capitalization (or dollar value of the stock market) in the United States grew by 154%. Meanwhile, productivity per worker over that same period increased by 20%, while the inflation-adjusted median full-time earnings actually fell by -1%. Put another way, the US stock market significantly increased in value, while, as seen in the chart below, workers' salaries and wages fell (red line) despite producing more (blue line).

So it was more than time to open greater access to the market and to avenues for savings and wealth for all. When Robinhood first launched its commission-free trading app in 2013, typical commissions were $7-$10 per trade. This meant if you invested $100 in a stock, it would need to increase by 7% to 10%, just to break even from the commission. While it took 6 more years, by 2019 nearly all the major players had also taken commissions to $0, dropping some barriers to investing.

Adoption of investing has grown. According to the Fed’ Survey of Consumer Finances, in 2013, 13.8% of families owned stocks directly. In 2022, that grew to 21%. And equally, the percentage of families with overall stock holdings increased by nearly 10% in that time.

Does this mean we at Robinhood, or the financial services industry in general, fully achieved what we set out to do—the work is done? Not even close.

Access needs to continue to climb. There’s still a disparity in investing, with a participation gap between the highest earners, and the next set. The same goes for wealth, level of education, and race. Greater prosperity comes with economic equality—both here and abroad.

And retirement accounts are still not widely adopted. The percentage of Americans holding a retirement account has been about the same since 2001. Today, that’s 54%, according to the Fed. Something that is probably way too low considering the lack of US government funding for social security in the future and the general rising costs of things.

As we close out the year, it’s good to reflect on what has been accomplished. After all, it’s hard to know where you are going, if you don’t know where you’ve been.

We’ll be taking a break next week. But we’ll be back on January 3rd, with our typical analysis of markets and the economy. Happy New Year!