Buying shares for the long term
When you invest in stocks (also called equities), you buy a share in a company and become a shareholder. Equities are typically more appropriate for long-term investing – for those who can ride out the highs and lows of the market in search of higher rewards.
Why do people buy stocks?
Investors buy stocks for various reasons. Here are some of them:
- Capital appreciation, which occurs when a stock rises in price
- Dividend payments, which come when the company distributes some of its earnings to stockholders
- Ability to vote shares and influence the company
Why do companies issue stock?
Companies issue stock to get money for various things, which may include:
- Paying off debt
- Launching new products
- Expanding into new markets or regions
- Enlarging facilities or building new ones
Benefits of Investing in Stocks
- Better Long-term Returns
- Dividend Income
- Diversification Benefits & Liquidity
- Ownership
- Hedge Against Inflation
- Transparency