Investing In Stocks and Companies
Investment in stocks via stock market is the easiest means to become a part owner of any company by buying the shares i.e. investing your hard-earned money. As the company grows & makes profits the profits are shared with the share owners in form of dividends, bonus shares etc. on a regular basis. Its also noteworthy that as the company business profits grow it attracts more people to it as they also want a piece of the cake. This is when the demand for the company shares goes up and you as investor make profit when you sell the shares partly or completely at a much higher price than you bought.
There are multiple other reasons for the share price to increase and one of them being the possibility of increase in business & profits in future. For example in today’s scenario if you find a Pharmaceutical company share available to be bought and you think that it will be the first to bring out vaccine or medicine for COVID-19 treatment…..what will you do??? Very probably buy with the expectation that this would be the first one to help humanity overcome this situation and also make handsome profits and what will happen to the share prices…shoot up, right? But there also a chance the company may fail with the medicine, what happens next is fall in share price as investors sell the shares and no one buys them so this demand and supply situation affects the share price.
As investors one needs to keep patience and let your money grow once you have invested in the company. The biggest challenge is to spot these companies that are likely to grow and give handsome profits in the medium to longer term.
The above are personal thoughts of the writer.