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Why people buy shares?

Updated: 9/15/2023
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Wiki User

10y ago

Best Answer

Three reasons:

First is because they like the company for non-financial reasons.

Second, and most commonly, is because they believe they can make a profit with the stock.

The third one will take some explaining: You can buy a stock to intentionally lose money on it. This is all tax. To calculate your capital gains tax, you add up all the money you made selling stock, then subtract all the money you lost on it and send them fifteen percent of the remainder. Under the immutable law that says a rich person would spend $10 to save $1 on tax, this makes sense. The logic of actually doing it escapes me; every $100 you intentionally lose is only going to save you $15 on your taxes, which is why the feds aren't super worried about people doing it.

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10y ago
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