this post was submitted on 07 Dec 2024
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Investments put your money to work by recirculating it through the economy in a productive fashion (theoretically anyway — I share your skepticism about the usefulness of the modern stock market). Investing in a company provides for the operating cost of that business. Putting cash under the mattress is not an investment. It’s just your savings.
Agreed, I don't get the stock market. I know how to invest in it but how can someone say it has value if in theory the stock can plummet while the business thrives, and the business can turn to absolute shit and the stock can thrive. Like right now Tesla's stock should be dropping. It's vehicles lost a large portion of buyers, sales were down in the first and second quarter of 2024, people say they may have finally been up in Q3 of 2024 compared to 2023, while "experts" are saying sales are slowing, and market competition is increasing on all sides, so future profits are in jeopardy, yet the stock is at the highest it has ever been.
Absolutely. Speculation on the stock market used to be illegal until the 80’s, meaning that investments had to be based on a company’s tangible performance. No options (until 1973), no stock buybacks (until 1982), even the rules for short selling were different.