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A very simplified version of what's going on is the company raises capital (money) by selling a portion of itself (an ownership stake) to the investors — the first purchasers of the stock. The existing owners allow this in the belief the capital raised from this one time sale will be used to increase the value of the company enough so they are better off than before.

A very simplified version of what's going on is the company raises capital by selling a portion of itself (an ownership stake) to the investors — the first purchasers of the stock. The existing owners allow this in the belief the capital raised from this one time sale will be used to increase the value of the company enough so they are better off than before.

A very simplified version of what's going on is the company raises capital (money) by selling a portion of itself (an ownership stake) to the investors — the first purchasers of the stock. The existing owners allow this in the belief the capital raised from this one time sale will be used to increase the value of the company enough so they are better off than before.

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Of course, you, I, or any other average Joe are unlikely to ever reach the level where we have a meaningful reason to attend a shareholders meaningmeeting and actually vote on anything that matters to us5. We don't really care about the ownership stake so much. We do care that stocks have shown stable and even increasing value over time. This makes them a useful place to park savings, that might even provide a good return.

As a practical matter, the stock market as a whole cannot indefinitely out-perform the general economy, relative to the portion of said economy devoted to investment practices. Over time the stock market and larger economy should rise or fall at about the same rate. But there are variances between the two, where sometimes the stock market can lead or trail what the larger economy is doing, and some individual stocks can out-perform the economy while otherothers languish. Individual investors can sometimes do very well for themselves this way (and the reverse is also possible). Sometimes the tail can even wag the dog, and investment behavior can actually spur real economic growth or decline.

Of course, you, I, or any other average Joe are unlikely to ever reach the level where we have a meaningful reason to attend a shareholders meaning and actually vote on anything that matters to us5. We don't really care about the ownership stake so much. We do care that stocks have shown stable and even increasing value over time. This makes them a useful place to park savings, that might even provide a good return.

As a practical matter, the stock market as a whole cannot indefinitely out-perform the general economy, relative to the portion of said economy devoted to investment practices. Over time the stock market and larger economy should rise or fall at about the same rate. But there are variances between the two, where sometimes the stock market can lead or trail what the larger economy is doing, and some individual stocks can out-perform the economy while other languish. Individual investors can sometimes do very well for themselves this way (and the reverse is also possible). Sometimes the tail can even wag the dog, and investment behavior can actually spur real economic growth or decline.

Of course, you, I, or any other average Joe are unlikely to ever reach the level where we have a meaningful reason to attend a shareholders meeting and actually vote on anything that matters to us5. We don't really care about the ownership stake so much. We do care that stocks have shown stable and even increasing value over time. This makes them a useful place to park savings, that might even provide a good return.

As a practical matter, the stock market as a whole cannot indefinitely out-perform the general economy, relative to the portion of said economy devoted to investment practices. Over time the stock market and larger economy should rise or fall at about the same rate. But there are variances between the two, where sometimes the stock market can lead or trail what the larger economy is doing, and some individual stocks can out-perform the economy while others languish. Individual investors can sometimes do very well for themselves this way (and the reverse is also possible). Sometimes the tail can even wag the dog, and investment behavior can actually spur real economic growth or decline.

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As a practical matter, the stock market as a whole cannot indefinitely out-perform the general economy, relative to the portion of said economy devoted to investment practices. Over time the stock market and larger economy should rise or fall at about the same rate. But there are variances between the two, where sometimes the stock market can lead or trail what the larger economy is doing, and some individual stocks can out-perform the economy while other languish. Individual investors can sometimes do very well for themselves this way (and the reverse is also possible). Sometimes the tail can even wag the dog, and investment behavior can actually spur real economic growth or decline.

As a practical matter, the stock market as a whole cannot indefinitely out-perform the general economy, relative to the portion of said economy devoted to investment practices. Over time the stock market and larger economy should rise or fall at about the same rate. But there are variances between the two, and individual investors can sometimes do very well for themselves this way. Sometimes the tail can even wag the dog, and investment behavior can actually spur real economic growth or decline.

As a practical matter, the stock market as a whole cannot indefinitely out-perform the general economy, relative to the portion of said economy devoted to investment practices. Over time the stock market and larger economy should rise or fall at about the same rate. But there are variances between the two, where sometimes the stock market can lead or trail what the larger economy is doing, and some individual stocks can out-perform the economy while other languish. Individual investors can sometimes do very well for themselves this way (and the reverse is also possible). Sometimes the tail can even wag the dog, and investment behavior can actually spur real economic growth or decline.

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