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Does trading stocks somehow cause an increase production of actual stuff? If not, I don't see how everyone ends up better off.
by peteradio 3y ago
Does trading stocks somehow cause an increase production of actual stuff? If not, I don't see how everyone ends up better off.
- hallway_monitor 3y agoPeople are saying that pump and dump schemes are unethical even if they're not always illegal. I would assert that investing for short-term gain is always unethical and the only way the stock market really benefits retail investors is when people invest and hold for long-term gains.
- AnthonyMouse 3y ago> Does trading stocks somehow cause an increase production of actual stuff? Sure it does. If the price of a stock changes, it becomes easier/harder for that company to raise money relative to other companies. If it's a good company then making their shares go up can increase production of actual stuff because they can afford to build more factories etc. If it's an inefficient company and its shares go down then the people who sold it can go invest that money in something else. There is a net increase in production if the company who gets the money is the one more efficient at using it to make stuff than the alternative, i.e. share price becomes "more accurate" as a measure of the company's market efficiency.
- jokethrowaway 3y agoYou have to buy stocks or you'll money will go to the government thanks to inflation. Without the government the stock market would be less crowded.