I just don’t understand how it works…when I hold shares in a company and I spend money there, am I technically making a very very small amount of that money back?
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what is the simplest way to explain how stock prices increase then?
In: Economics
Stock prices increase because of supply and demand. If you buy an iPhone you’re not directly affecting the price of apple shares but you are increasing apple’s revenue and the higher apple’s revenue is, the more people will want to buy its shares (demand will go up) so share price will go up.
Of course, if an iPad happens to blow up and cause a plain to crash, people will be afraid of what’s to come and panic sell (supply will go up) so share price will go down more by many orders of magnitude more.
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