Once you purchase a stock, there are ONLY two ways to make money from that purchase. The first way is from selling the stock at a higher price and the second way is from dividends.
Once you purchase a stock, there are ONLY two ways to make money from that purchase. The first way is from selling the stock at a higher price and the second way is from dividends. Each year, companies make net income and they basically have two options reinvest that money in the business (to grow the business, pay down debt, purchase another business, or just save the money) or they can pay it out as dividends. When a company uses the money to grow the business, it usually makes the stock price increase over time because the company expects to make more money in the future. This means youll make your money later (maybe next year or years later). When you buy stock in a company because they are strong and have the potential for earnings in the future that is a long-term strategy that many people use, including Warren Buffet. His portfolio grows because stock prices for the companies he owns grow over time. When his portfolio grows, his net worth grows, but he really only makes money on
