Each year, I write this letter to distill the essence of my conversations over the past year with clients, employees, world leaders, corporate CEOs, and investors saving for retirement. Lately, no matter who I talk to, I hear the same thing: we’re not sure how to navigate the current environment. It’s an understandable feeling. We are living through a unique moment – one where events that might once have defined an entire decade now seem to happen with startling regularity: a global war, trillion-dollar companies, a fundamental reshaping of international trade, and perhaps the most disruptive technological revolution since the dawn of computing.

Unfortunately, people often interpret these phenomena through a short-term lens. Daily market swings are seen as harbingers of long-term trends, and complex economic or technological shifts are compressed into sensational headlines. We live in a world of instant information and instant reactions. At times, it feels like a dopamine-fueled environment – a constant stream of information that feeds our short-term impulses. Yet speed can distort our perspective, crowding out the space for long-term thinking.

To be fair, short-termism in financial markets has its value. It’s a necessary mechanism for absorbing new information, pricing risk, and allocating capital. Over the long run, however, staying invested is far more important than trying to time markets. Over the past two decades, every dollar invested in the S\&P 500 has grown more than eightfold. If you missed the ten best trading days, your returns would have been less than half that amount. What’s more, some of the market’s strongest rallies have often followed periods of maximum anxiety in the headlines. The risk is that we become so focused on the noise that we lose sight of what’s truly important.

The forces behind today’s headlines have been building for some time. The old model of global capitalism is breaking down. Countries are spending vast sums to achieve self-sufficiency in key areas like energy, defense, and technology. At the same time, the vast majority of wealth is flowing to asset owners, rather than people who depend primarily on income from labor. Since 1989, a dollar invested in the U.S. stock market has appreciated more than 15 times as much as a dollar tied to the median wage. Now, artificial intelligence has the potential to repeat this pattern on an unprecedented scale – concentrating wealth in the hands of the companies and investors that are best positioned to take advantage. This is a major source of economic anxiety today: a deep-seated feeling that capitalism is working, but not for everyone.

Short-term investing won’t solve this problem. On the contrary, only long-term investing can help countries build domestic industries, help individuals accumulate lasting wealth, and demonstrate how the fruits of national development can be shared by all. The ideal of long-term investing can create something akin to a civic miracle. When people save and invest on the scale of decades, rather than days, capital markets can efficiently allocate those funds to finance companies, infrastructure, and jobs. When this cycle happens within a country’s borders, individual futures become linked to the future of the nation. You help fund the nation’s development, and the nation’s development helps grow your wealth in return.

My belief in this civic miracle is certainly shaped by my professional background. But I speak not only as the CEO of BlackRock – this belief is rooted in my decades of personal experience, witnessing how investing can help more people share in the rewards of economic growth. It also stems from my own family’s story. My father was born in 1925, and my mother in 1930. They came from humble beginnings. My father ran a shoe store, and my mother taught English. But they lived within their means and committed to saving and investing. This was in the 1950s and 60s, a time of massive investment in the U.S. Interstate Highway System, a mid-century industrial boom, and the reshaping of national life by the automobile industry. In their own small way, they participated in and supported all of it. They were part of the capital flows that built modern America. Over time, the fruits of that growth were returned to them. By the time they retired, their savings were enough to support a comfortable life well into their hundreds. Because their wealth grew in lockstep with the expansion of the American economy.

This phenomenon is far from unique to America. Across different countries and generations, the pattern is strikingly similar. Families that have invested broadly and consistently, through depressions and wars, inflation and financial crises, and even global pandemics, have seen their wealth grow in tandem with their national economies. It is this history that sustains my long-term optimism. Not because the road ahead will be easy, but because markets tend to reward those who stay invested through uncertainty.

This is the mandate of our time: to broaden opportunity and ensure that more people have a chance to participate in their nation’s growth. Because today, too many people are excluded. Many lack the funds to invest in the first place – those families living paycheck to paycheck. If you’re struggling to afford next month’s rent, next week’s groceries, or an unexpected bill, investing is out of reach. The starting point, therefore, must be to help people build a basic foundation of financial security. There has been progress on this front. Emergency savings accounts that allow employer matching and penalty-free withdrawals are becoming increasingly common. And more and more countries are experimenting with “baby bonds,” giving children an investment account at birth with a stake in their nation’s future.

Even with savings, market participation remains limited. The U.S. may have the highest rate of market participation in the world, but still roughly 40% of the population does not invest in the capital markets. Globally, participation rates are far lower. Billions of people are watching from the sidelines as their national economies grow, keeping their savings in low-interest bank accounts rather than sharing in the rewards of investment. Markets function effectively when investors trust that they can trade at a fair price. This trust helps companies raise the capital they need to grow, and it allows families to diversify their investments across a range of assets at low cost, rather than relying solely on a single property. Expanding this system through technological advances and financial literacy can allow more people to share in economic growth. Over time, the same technological advances will also help bring greater transparency to certain areas of the private markets – such as infrastructure and private credit – and potentially open doors that have been inaccessible to most individual investors. Half the world’s population carries a digital wallet in their phone. Imagine what it would look like if that same digital wallet allowed you to make long-term, diversified equity investments as easily as sending a payment. Tokenization can accelerate this vision by upgrading the underlying architecture of the financial system – making the issuance, trading, and access of investments far simpler.

I began this letter with several forces that make this discussion particularly urgent today: the reorganization of global trade, the rise in inequality over the past generation, and the risk that artificial intelligence could further widen the gap if broad market participation is not achieved. I will next turn to examples from four countries – of which there are many more – that are taking steps to broaden market participation and help their citizens grow alongside their economies. The final section of this letter will turn to how BlackRock is working with our clients to advance these goals.

[Foresight News]