2006-12-16 02:58:01 · 6 answers · asked by x_Hayley_x 2 in Education & Reference ➔ Homework Help
When you buy shares in a business you own a piece of that business. It's like if you and a friend started a business, you would own half and your friend would own half, splitting the profits in half. A share of a publicy traded business is the same thing but with many shares available to buy allowing many people to be co-owners. There's some complicated accounting done to come to the price of each share the company makes available.
As the business goes up in value or sales go up so does the value of the shares. The price of each share will rise. The rise in share price is often greater than any interest you'd get if you were to just put your money in a savings account. But the share price can go down. If the business fails or there is some wrong doing by the company the price of each share can go down. Buying into a business is risky and should only be done after some research. My best advise is to buy stock in companies whos products you enjoy using.
2006-12-16 03:11:34 · answer #1 · answered by Max B 3 · 0⤊ 0⤋
I buy a stake in a company to hopefully see the share price increase and earn dividends. Its also good fun to regularly check on how your stock is doing. I have found it more effective at generating income than leaving money in a Building Society account.
2006-12-16 15:31:25 · answer #2 · answered by James Mack 6 · 0⤊ 0⤋
They hope the business will increase in size so their share will be worth more, or that it will make excess money so the company will pay the shareholders a "dividend" each year.
2006-12-16 17:28:32 · answer #3 · answered by philjtoh 2 · 0⤊ 0⤋
In the hopes they will "share" in the profits.
2006-12-16 11:00:08 · answer #4 · answered by Reo 5 · 0⤊ 0⤋
Its gambling
poor people put a bet on horses
rich people put a bet on IBM
2006-12-16 11:06:53 · answer #5 · answered by SeabourneFerriesLtd 7 · 0⤊ 0⤋
To get money real easy, real quick.
2006-12-18 14:54:05 · answer #6 · answered by bezza 2 · 0⤊ 0⤋