Expert Take written in a speech bubble over an image of a laptop and a stack of books

Investing as a concept has existed in some form or another for centuries — but that doesn’t mean it was always accessible to everyone. In fact, what started as an opportunity for only a select few with access to a specific exchange or index took many years to grow into the widely available digital market we’re familiar with today.

Let’s dive into some examples of investing and human ingenuity over the course of history, starting with the very first stock trading exchange.

Timeline graphic highlighting the following dates: 1602 (The Amsterdam Stock Exchange was established as the first modern stock exchange); 1792 (The Buttonwood Tree Agreement formed the New York Stock Exchange); 1875 (American Express was the first company to offer a pension); 1896 (The Dow Jones Industrial Average launched); 1952 (Only 4.2% of Americans invested in stocks); 1957 (Standard and Poor’s 500, the S&P 500, was introduced); 1971 (The Nasdaq was created and the Nasdaq Composite index launched); 2021 (56% of Americans own stock)

Stock Trading: The Beginning

A few of the first players in stock trading: The Amsterdam Stock Exchange and the Buttonwood Tree Agreement. While it would be fascinating to be a fly on the wall in the conversations that began these two premier groups, their beginnings were a far stride away from the highly accessible digital market of today — they were mostly exclusive to elite merchants and brokers.

The Amsterdam Stock Exchange

The Amsterdam Stock Exchange was established in 1602 and is considered the first modern stock exchange. By and large it was created to trade the stock of Dutch East India Company (Verenigde Oostindische Compagnie).

The Dutch East India Company, which was the first publicly traded company, competed for the exports from the spice and slave trade and offered shares to buy and sell for these early voyages.

Initially, trading only occurred because of that single company. The first derivatives began trading in 1607 and the first dividend distributions followed several years later.

The Buttonwood Tree Agreement

The Buttonwood Agreement is the founding document of the New York Stock Exchange (NYSE). But it was significantly more exclusive than the market we know today.

In May of 1792, 24 of New York’s most powerful merchants met secretly at Corre’s Hotel for a reason that changed the world: Putting together the all-powerful New York Stock Exchange. But not just anyone could buy in — the agreement was only inclusive of those two dozen elite members of the business community.

Why the name Buttonwood Agreement? Simple. Rumor has it they met under the shade of a buttonwood tree.

The Dow Jones Industrial Average

Jumping ahead over 100 years brings us to a more familiar name. Time for a pop quiz: Which 12 companies originally made up the Dow Jones Industrial Average in 1896?

Let’s take a look:

  • American Cotton Oil Company
  • American Sugar Refining Company
  • American Tobacco Company
  • Chicago Gas Company
  • Distilling & Cattle Feeding Company
  • General Electric
  • Laclede Gas Company
  • National Lead Company
  • North American Company
  • Tennessee Coal, Iron and Railroad Company
  • United States Leather Company
  • United States Rubber Company

You and I know it as the Dow, and it forms an index of 30 prominent companies listed on U.S. stock exchanges.

Charles Dow, an American journalist, co-founded Dow Jones & Company with Edward Jones and Charles Bergstresser. None of the original 12 industrials on the index remain. General Electric was the longest lasting company in the index.

S&P 500

The Standard and Poor’s 500 (S&P 500) index was introduced in 1957 to track the value of 500 corporations that have their stocks listed on the New York Stock Exchange (NYSE). During its first decade, the value of the index rose to nearly 700, due to the economic boom that followed after World War II.


The Nasdaq was the world’s first electronic trading system. It was created with no physical trading floor.

In 1971, the Nasdaq was created by the National Association of Securities Dealers (NASD), which was later consolidated into what we now call the Financial Industry Regulatory Authority (FINRA). The Nasdaq Composite index, which includes most of the stocks listed on the Nasdaq exchange, was also launched in 1971.

These agreements, indexes and exchanges paved the way for individual investors to have better access to the markets. And, of course, the digital age has brought us to this moment in time when anyone with internet connection can make trades and buy or sell stocks with the press of a button. We’ve certainly come a long way.

Individuals and Investing

Investing in some form is almost as old as time. Whether it be Venetian moneylenders in the 1300s or merchant traders in the late Middle ages, raising money through trade is not a new notion. In the US, the uber wealthy were the first investors. Let’s take a look at some of the earliest investors and the slice they owned of the American economy:

  • John D. Rockefeller (1839-1937), America’s first billionaire, owned 1.53% of the U.S. economy
  • John Jacob Astor (1763-1848), an investor in New York real estate, owned 0.93% of the U.S. economy
  • Stephen Girard (1750-1831) made his money in shipping and as the largest investor in the First Bank of the United States; he owned 0.67% of the U.S. economy
  • Andrew Carnegie (1835-1919) made his money through steel; he owned 0.60% of the U.S. economy

Pensions and Other Wealth-building Tools

Pensions kicked off access to markets and the creation of everyday millionaires. As companies added sums of money to a fund during employees’ employment years, employees could draw on the money in their retirement years. Fun fact: American Express was the first company to offer a pension in 1875.

Pensions are tougher to find in employer benefits packages today, that’s partially due to legislation that helped put the responsibility for retirement into the hands of the employee. The development of instruments such as mutual funds, 401(k)s, IRAs, and more recently exchange-traded funds (ETFs) have played key roles in democratizing wealth building for everyday individuals.

Today, both institutional and retail investors invest with enthusiasm. In fact, Gallup found this year that 56% of Americans own stock, based on polls conducted in April and July 2021. Similarly, 55% invested in 2019 and 2020. Back in 1952, only 4.2% of the population was investing in stocks.

Democratization of Investing

The internet’s role in the accessibility of investing by everyday people cannot be understated – it truly has made it easier than ever to access the stock market. The rise of self-directed online trading firms in the late 90s resulted in a substantially lower cost per trade, reducing a big barrier for many individual investors. At that time, the online brokers were able to charge as low as $7 per trade, while the full-service brokers (think big banks) were charging anywhere from $50 up to $100 per trade. The game changed again in late 2019, when trading commissions were cut to zero across the industry, another win for the individual. Together, this has given rise to a new type of investor and trader — those who carry lower amounts of wealth can utilize the markets.

Mergers and acquisitions have also changed the brokerage landscape and reduced the number of choices to select from, which is likely a positive for the retail investor. (Remember Scottrade?)

And, of course, regulation and new entrants will constantly challenge the new status quo, but investing is evolving faster than ever.

Where do we go from here?

It’s true that history is constantly being written, and market and investing history is no exception. The pandemic was a pivotal moment for individuals. Many realized they wanted to be in control of their own financial destinies. They also learned they have the capability to do that with their own hands. This created opportunity for brokerage firms, new and old alike, to step up their offerings to be even more accessible to retail investors. As a society, I think we’re all still learning how to best use the control/power we have over our financial lives to our advantage.

The rise of popularity in cryptocurrency and meme stocks are great examples of how education will be a big part of the way the industry moves forward. Just because a security or investing opportunity is hot right now, doesn’t mean it fits with an individual’s goals and timeline. That is only understood through education and knowing how to analyze investments and set goals. Self-responsibility is key when it comes to investing these days. Financial education can be found in many places, but not all sources are created equal. There is a cacophony on the internet, radio, TV, social media and more. The key is clearly understanding your source and their motivation for education.

I’ve been saying this for years: Investing should become a part of every single public and private school curriculum — investing education shouldn’t be just up to the individual.

It took centuries to create the modern-day stock market, and it continues to evolve every single day. In fact, you put your fingerprint on the stock market every time you invest or trade.

So, again. The question: Who can you trust?

What I know for sure is that you can trust us at Ally to have your back — we always have and we always will. Here’s to your future.

Looking for more expert insights and trends in the current market?

Sign up for the Weekly Viewpoint

Speech bubble icon next to text "Expert Take"

Headshot of Lindsey BellLindsey Bell, Ally’s chief markets & money strategist, is an award-winning investment professional with a passion for personal finance and more than 17 years of Wall Street experience. Bell’s unique ability to connect the dots between data and real life and craft bite-sized money ideas that people can use and apply stems from her deep background as an analyst, researcher and portfolio manager at organizations including J.P. Morgan and Deutsche Bank. She is known for demonstrating why and how an understanding of all things money improves a person’s finances and overall wellbeing. An ongoing CNBC contributor, Bell empowers consumers and investors across all walks of life and frequently shares her insights with the Wall Street Journal, Barron’s, Kiplinger’s, Forbes and Business Insider. She also serves on the board of Better Investing, a non-profit focused on investment education.

Click here for more content from Lindsey Bell.

The opinions expressed here are not meant to be used as investing advice. For more information, visit our website.