When "investing" in the stock market, 99% of the time, no investment is
ACTUALLY made in any company - you simply pay the current owner of the stock
and you (in theory) get the stock certificate. The PREVIOUS owner makes all
the money (i.e. you are actually investing in him/her). The exception (about
1% of stock trade values) is an Initial Public Offering - when the company
first issues a set of shares/stocks. In this rare case, you can
actually "invest" in the company, giving it seed capital for some work you
hopefully believe in / are excited about.
AT ALL TIMES, you are buying something that must be sold to somebody else
(occasionally the company) to obtain value yourself (a few companies issue
dividends these days, but these are usually small). HENCE, to get
your "investment" back, someone must be convinced to buy your investment at
a (hopefully) higher rate. Your profit comes after clearing all charges for
commissions, management fees and capital gains taxes.
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