Investing is one of the major engines of financial success in America and has been used by countless individuals as a pathway for wealth and economic wellbeing. In recent months, we’ve seen an uptick in new investors entering the arena looking to capitalize on the moment and secure their financial futures through stocks and investing.
At face value, this is excellent news! People are becoming more acquainted and acclimated with different models and methods of building wealth. However, there’s a hidden problem that’s recently been uncovered. Many of these new investors assume significant risk seeking major rewards without considering the long-term implications of their actions. There have been numerous accounts of new, inexperienced investors putting their entire life savings into “meme stocks” only to find their money all but disappear.
This phenomenon highlighted the need for an Investors’ Bill of Rights, which I and my friend Jay Clayton, former Security and Exchange Commission Chair, penned. The points outlined in the Investors’ Bill of Rights provide safeguards and protections for investors to help mitigate the risk of loss by improving their overall financial literacy. This ensures that investors make sound decisions and can strategically move forward in their quest for wealth creation.
Today, Robinhood, an app-based company known for its commission-free trades of stocks and exchange-traded funds, became the first company to sign on to the Investors’ Bill of Rights and agree to further empower its users with greater levels of financial literacy and knowledge as they trade.
Operation HOPE and I commend Robinhood for its commitment to uplifting and equipping its users with the tools they need to make the best financial decisions as they continue pursuing the American Dream through the democratization of finance and investing. We also look forward to many other investment companies and financial institutions signing on to what we believe to be a powerful set of guidelines that can help steer the culture of investing in a positive direction.