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Aren't stocks supposed to yield dividends or are people only buying it to speculate on the resale value? If it is the latter, then stocks seem to merely be a vo
by samus 4y ago
Aren't stocks supposed to yield dividends or are people only buying it to speculate on the resale value? If it is the latter, then stocks seem to merely be a volatile gold equivalent: valuable, but not because of having much inherent value.
- Mistletoe 4y agoUnfortunately almost always the latter these days.
- osigurdson 4y agoThe P/E ratio of the S&P 500 is somewhat reasonable at the moment. https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...
- adrianN 4y agoStocks paying dividends or stocks increasing in value is functionally the same thing, but taxed differently. Companies for example sometimes have stock buybacks to increase the value. They could also use the money for dividends, but for tax reasons they don't.
- ChadNauseam 4y agoStocks paying dividends is not the same thing as stocks increasing in value. Stocks increasing in value means that the expected income from holding the shock went up. Stock buybacks accomplish that by decreasing the number of shares (with the assumption that the amount paid in dividends stays the same, so the divididends/share goes up.) The comments above are right that investing makes much less sense in a world without economic growth. Even if companies continue to pay dividends, the US stock market has had 7% real annual growth over the past hundred years and that drives a huge amount of investment.