Why stocks were created
About growth-stocks If you're going to invest in equities, understand the basics: When the American stock market was invented in the late 18th century, it had one purpose: profit sharing. That's it. A company needed capital, you gave them some and they paid you dividends. Simple. The only reason why share prices rose was that shares in any company were limited in number -- just like today. If you coveted shares in a company but couldn't find them, you'd have to offer a shareholder a premium over what he paid and voilå: you owned those shares. Hence the notion of "growth stocks." But equity shares were never meant to be traded as a means of investment, because trading shares isn't investment -- it's speculation with odds even less reliable than those in Las Vegas. You're essentially praying for a growth stock's share value to go up. In the meantime, the growth stock pays you nothing while you're a-wishing and a-hoping. The beauty o...