Should Canadians buy shares and will it help the economy?

Answer 1

The answer is both yes..

Canadians should buy shares and it will help the economy..

let me explain:

companies sell share to the public when they want to expand their business, seeking investors to help kick-start their business or on the verge of bankruptcy..

so no matter the condition, when people (from Canada, hereinafter refereed to as Canadians) purchase these company shares, they will get returns on investment (ROI) in the form of dividends.. so they will become richer - if they make more profit..

in that case, Canadians should buy shares to make more profit.. (YES)

on the other hand, when they invest money into the company, in the form of buying shares, the company can take the money and expand their business.. expansion of business will help the canadian economy this way:

- company will employ more people

- company will definitely pay more taxes

- company will increase production and aid Canada's export.

- company will be competitive in the global market and help increase Canada's business and economic reputation around the world

- company will be able to invest more in research and development and also training of the workforce, thus increasing the possibility of entrepreneurship will will end up increasing Canada's economy..

- etc..

in that case, buying shares will help Canada's economy..

Note: buying shares is not = profit.. this means that profit is a result of proper management.. just because Canadians buy shares doesn't mean they are guaranteed profit.. so if the business fail, then the Canadian who bought the shares will lose and the economy will lose too because all the workers will be without job..

Advice: not withstanding the note above, my advice is that you should always buy shares when you can afford.. but make sure you study the business properly..

how to study the business?

most commonly used tool is the CAMPARI Model

C = Character: make sure the management is sound

A = Action: check what they want to do with your money properly

M = Management: ensure the company already have track record of success

P = Purpose: Make sure all their actions are for business not for personal purpose. (don't invest for the manager to buy burger for his kids :) Friedman (1960) said "business of every businesses is business ".. )

A = Amount: check the amount needed.. ensure you always have backup in case of business failure..

R = Repayment: how much will they pay you back and when?

I = Insurance: is the business operations insured? if business fails whatz up for you?

Good luck Ms Investor.