cbabcock wrote:
Money in the stock market is, for the most part, simply parked there. It produces nothing. It doesn't belong to the company, it is the way those with money trade ownership with each other. The company doesn't get that money to invest in new stuff or employees or CEOs. Only when the company sells new stock, or sells treasury shares, or uses earnings or borrows does that company have new money to invest.
When, as you say, an investor actually starts something new, or buys and puts money into an existing venture, that investor is actually pumping money into the economy.
Yet today most of the financial "news" is whether stock prices are up or down, and for every dollar used to buy stock at a higher price, the seller takes his money out. Real financial news would report whether wages are up or down, prices are up or down, production is up or down.
Money in the stock market is, for the most part, s... (
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Money is not exactly "parked there." Each stockholder is an individual owner of the companies in which he or she owns stock. They have a voice in the running of the company at stockholder meetings. If they don't attend they can vote by proxy. As part owners, no matter how miniscule a percentage that might be, how well they do depends on the performance of the company. Dividends may be paid or some companies, like Amazon, pour earnings back into the growth of the company. This added value to the company, in turn, adds value to individual stocks. It's the same as if you owned your own business. All your equity would be tied up in the business and you'd have to live off the profits. Same with stocks. You would also hope that, perhaps, over time, the business would grow in value and when it came time to retire you could sell it for a nice profit. Same as stocks.