Is the stock market just a big scam?

Question

Unless the company selling the stock pays dividends, isn't it just a big scam? They use your money and you get a "share" that is only as valuable as the demand for it from other "investors"

Answer 1

Its called investment and it has risks. If you do it properly, you make money.

Answer 2

yes and now th emillionaires are beginning to loose their shirts

Answer 3

You are right in that shares are only as valuable as supply and demand dictates. But if you look at it that way, then pretty much any barter system is a "scam." For instance, you probably have used a $1 bill before, which is really just a piece of paper, but because the collective agrees on a certain value of that piece of paper, it has worth. Same thing with other tangible objects like diamonds or flowers.

The reason why the value of stock seems arbitrary or baseless is because you don't receive a tangible object for your money. Instead you get part "ownership" of the company and you can actually have an active role in the company by expressing your opinions about and voting on the direction of the company in the shareholders' meetings.

This is why the stock market is legal. You can't sell nothing, that is illegal. Unless you're e-bay, in which case you can sell your soul and actually get money for it. Not a bad transaction if I do say so myself!

Answer 4

To the unenlightened, it may appear that way.  On the other hand, the open market is the most open expression of capitalism.  I recommend the latter

Answer 5

You have no idea of finance nor economics.

Why don't you do some studying before you tell others how immature, naive and uneducated you are.

Answer 6

You can make money on the stock market but only if you are patient and take things slowly (unless you're a risk-taker).  You also need to really study the market if you want to invest and possibly consider a reputable stockbroker.

Answer 7

Money can be made in stock market, but it is only the people on the inside who get all of the inside information that make the REAL money. The other people who make the money are the fund managers and brokers who do very little except execute trades. They make a ton of money also.

But the little investor such as you or I would have a tough time making consistent decent money over the long run.

Answer 8

It's not a scam.  It's great to have dividends because you know how much you can make on your money, but that demand for stock goes up and down in a very real way.  When the demand is high and you sell at a price higher than you bought, you certainly make money.  And if you look at history, for people who hold stocks for a long time, they tend to do better than anyone who just puts their money into CDs or savings accounts.  The interest you make has to beat the rate of inflation or you are essentially losing money.  While there is definitely risk in the stock market, I've done fairly well and advocate  having a diverse portfolio with the majority of your stocks long-term holds.

Answer 9

Its not a scam. Dividends are just part of it.

If you hold stocks for long enough (say 5-10 years or so) you WILL make money. Stock markets are not for making quick money, its more for long term investors.