If almost everyone can earn money on stocks using good strategies. Why does a company shares profit or losses(or i do not know what the proper term is). What benefits company received? I came here because i cant find or not satisfied by the answers given by google.
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"using good strategies". In a certain sense, it appears the best strategy is no strategy. Buy a little bit of everything. That's feasible today with ETF's; costs can be as low as 0.1%.– MSaltersCommented Apr 14, 2020 at 8:29
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3 Answers
- The shareholders are the owners of the company. Any time you buy shares in a company, you become a co-owner of that company. So if the company makes a profit, as a co-owner, you will want some part of that profit in the form of a share dividend. If you never get anything, you will vote out the board that's running the company, and vote in somebody who will share the profits.
- If a company wants to expand, it can do that buy creating and selling new shares. The company can use that money raised to invest in the business. But nobody would ever want to buy shares if they didn't get anything in return. So the bargain is that if you buy the shares, then you will get some of the profit created by the newly expanded business.
The company gets the investors’ money when it issues and sells the shares (but it’s not involved when the shares are later repeatedly resold on the stock market). That’s a common way for companies to raise money for expansion or capital investment. In return for that money, the investors get ownership of the company.
answered Apr 13, 2020 at 5:46
A company is paying stock owners a sort of historical debt. When the company issued their stocks the first time it has been given free money by the investors but it also gave away a part of the company to these investors. These parts of the company can since then also can change ownership and thats the main motivation behind stock trading: You hope to get part ownership of a profitable and growing comoany to profit off their profits.
