There are plenty of companies that never pay dividends, yet people buy them.
II struggled with this as well for a while. You can look at it this way, they are worth money because they could pay dividends, but they don’t actually have to. Your bar of gold is worth a certain amount of money equal to the money you could sell it for, and your money is worth something because you could buy something with it.
(Most) stocks represent partial ownership (read: control) of a company and most of their value is derived from that.
For an extreme example: if the stock price were to drop below the amount of money that could be made by just selling off all of the assets, then someone would (in principle) just buy all the shares, sell the assets and make a profit.
Each share represents a small bit of control over the company and their assets.
Why would anyone buy a stock that will never pay a dividend? The company is worth money because they pay a dividend, not despite it.
There are plenty of companies that never pay dividends, yet people buy them.
II struggled with this as well for a while. You can look at it this way, they are worth money because they could pay dividends, but they don’t actually have to. Your bar of gold is worth a certain amount of money equal to the money you could sell it for, and your money is worth something because you could buy something with it.
(Most) stocks represent partial ownership (read: control) of a company and most of their value is derived from that.
For an extreme example: if the stock price were to drop below the amount of money that could be made by just selling off all of the assets, then someone would (in principle) just buy all the shares, sell the assets and make a profit.
Each share represents a small bit of control over the company and their assets.