After finishing a guide on how to invest your savings in your 20s and 30s, I shared it with many of my friends.
“Thanks, that’s cool, but the stock market is not for me”, one replied with wide-opened eyes as if I had suggested joining the Devil’s cult.
Why such an immediate negative reaction? What is wrong with the stock market?
Let me try to guess some of the complaints you may have: the stock market is the climax of an economic system addicted to consumerism. A system where culture is shaped to enable corporations instead of corporations designed to enable culture. And the stock market is the key driver of this misguided focus. The stock market is concerned by one thing and one thing only – profits – and therefore promotes all sorts of bad incentives that hurt society.
You may have seen this cartoon:
But what if I told you that the stock market is just a tool and that, as such, it isn’t intrinsically good or bad? Like Facebook or Instagram or any other social media platform, it is just a tool that can be wielded in a multitude of ways and for several purposes (I’ll elaborate on social media on another post). It is how you use these tools that can be judged as good or bad.
Forget for a moment your biases of the stock market and consider only this: the stock market is a tool with which you finance companies’ growth investments in return for part of the profits they will generate with that growth. Do you see anything intrinsically wrong with that?
What if I told you that, through the stock market, you can help mission-driven companies do the work they want to do? Companies that have sustainability and social benefit embedded in their core values?
What if I told you that the stock market enables win-win-win opportunities, where sound companies win, you win, and society as a whole win? Companies that genuinely want to do good are (like any other company) loathed by the constant uncertainty of whether they’ll survive in the market. By investing in them through the stock market, you’re improving their odds of survival, allowing them to provide their good service to society, while making sound investments that will benefit you.
I understand that seeing many people using a tool with wrong intentions may discourage you from using that tool at all. But I urge you to distinguish the use of the tool from the tool itself. Make the intellectual effort of seeing the stock market for what it is, and consider investing, for everyone’s sake.