2 Answers: How do people make money from shares or stocks?

Question

In addition to, or instead of, paying dividends to shareholders, a company can choose to spend that money on resources that increase its future profits, such as building more factories and hiring more employees. Large companies even use their money to buy smaller companies (e.g. Amazon recently bought Whole Foods).

So the dividend varies a lot from company to company. Stable companies might pay a dividend of 3% per year and have a fairly steady stock price. Whereas growing companies reinvest their profits, making them more valuable, so the share price increases. Then a shareholder doesn’t make money until you sell your shares.

You can look up the dividend payment history of each individual company. They do try very hard to pay at least as much as they have in the past, otherwise no one would dare to own their stock.

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Anonymous 8 months 2 Answers 80 views 0

Answers ( 2 )

  1. There are two main ways you can profit from shares on companies that you can buy on the stock market. The first and most common way to make money with stocks is buying them when they are selling for a low price relative to their actual intrinsic value and then selling them again once they have gained traction and are over valued and hence ready to sell. This is called making money from the capital gains on a stock.

    The other main way to make money from stocks and shares is by finding companies that pay dividend payments to shareholders. Many of the growth stocks like Apple do not pay dividends and people invest instead for capital gains. However many more like AT&T do pay dividends and these can be grouped into your portfolio allowing you a passive income stream of money from dividend paying stocks.

    So those are the two main ways you can make money by buying, selling and holding stocks and shares.

  2. Some good companies to invest in that have always made me plenty of safe money have been the REITs which are companies that are in real estate and you can invest in them and be in real estate as well. And that is without all the BS one would normally need to go through to start a real estate based business.

    You see if you go and purchase property yourself and all the rest of it then there is a lot of work to do and a lot of room for error. While if you research the best companies that already work on the biggest real estate projects well then just invest in these companies which are called REITs.

    When you buy a REIT your money is safely invested in the real estate market allowing you to profit and often get dividend payments. So that is another type of investment which is stocks and shares based however you also get to be in the stable real estate market and very often your funds are highly diversified in different sectors of real estate: apartments, housing, office buildings, hotels and resorts, etc.

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