Australian Markets

It’s no secret that the stock market often feels like an exclusive club, reserved for the wealthy and powerful.

For years, investors have complained that the system is rigged, tilted in favour of those who have insider access and the ability to move the markets at will.

But is it really an “elitist” system, or is it simply a matter of knowledge, resources, and strategy?

Let’s dive into why many feel the stock market works more for the elite than the average investor—and why this belief might not be far from the truth.

Insider Access: The Rich Get a Head Start

One of the key arguments behind the elitist stock market narrative is insider access.

Large institutional investors, hedge funds, and the ultra-wealthy often have the ability to access information and opportunities long before the average person ever hears about them.

This could range from early access to initial public offerings (IPOs) to exclusive investment opportunities that aren’t available to the public.

These investors often have teams of analysts, sophisticated tools, and vast resources to make quicker, better-informed decisions.

As a result, they can profit from trends and movements before most retail investors even have the chance to react.

For the average person, trying to keep up with these insiders feels like a losing battle – especially when information asymmetry is stacked against them.

The Power to Influence: The Ability to Move Markets

Another major factor contributing to the feeling that the stock market is designed for the elite is the sheer scale at which institutional investors operate.

When these firms buy or sell large amounts of stock, they have the power to significantly influence market prices. A single buy order from a large hedge fund can send a stock price skyrocketing, while a large sell order can send it plummeting.

This kind of market manipulation may not always be intentional, but it highlights the power of scale.

When you’re trading with billions of dollars, you can affect the entire market in ways that individual investors simply can’t.

This unequal playing field leaves the average investor feeling small and powerless, unable to compete with the big players who shape the markets.

The Cost of Participation: High Fees and Barriers to Entry

For those who do manage to get into the stock market, there’s the issue of high fees.

Many retail investors face significant fees when dealing with fund managers, brokers, and financial advisors. These fees eat into returns, especially over the long term.

Meanwhile, large institutional investors often have the ability to negotiate much lower fees or avoid them altogether due to their size and influence.

Additionally, the complexity of the stock market itself often makes it inaccessible for the average person.

While the wealthy can afford to pay for expert advice and advanced tools, everyday investors are left trying to navigate a system that seems designed to be difficult to understand and navigate.

Without access to these resources, it’s easy to see why many feel that the system is rigged.

The ‘Unseen Hand’ of Wall Street: The Rich Keep Getting Richer

Even the most seasoned investors can’t deny that the stock market has a long history of favouring the wealthy.

Whether it’s government bailouts during financial crises or the fact that many of the largest corporations have deep ties to political and economic power, there’s no shortage of evidence that the system seems to be stacked in favour of those who already have wealth.

And while we may not always see it, there’s an ‘unseen hand’ that quietly benefits the wealthy.

From tax breaks on investment income to preferential treatment in the form of lower rates and fewer regulations, the wealthiest individuals and corporations benefit from policies and structures that leave the average person struggling to keep up.

Is There a Way to Beat the System?

It might sound like the system is rigged…and in many ways, it is.

But that doesn’t mean it’s impossible to succeed. The truth is, many average investors have found ways to leverage the same tools and strategies that the wealthy use.

They’ve just had to learn how to think like the wealthy.

By learning the ins and outs of trading, cutting out middlemen, and making smarter, more informed decisions, everyday investors can level the playing field.

You don’t need to be part of the elite to succeed. All you need is the right knowledge, the right strategy, and the willingness to take control of your financial future.