Where does this increase in wealth come from specifically? Thank you

 

  • stefff67 9:01 am on October 7, 2009

    It’s all about buy low and sell high.
    However most stocks keep on falling.
    So it’s hard to find the good ones that can make you a good profit.

  • Josh V 9:01 am on October 7, 2009

    For stocks, there is a market of buyers and sellers, when these buyers believe that the price of the stock is worth more than you paid for it the value increases and vice versa when the value declines.(Mutual funds are a group of stocks)

    For bonds, you receive a monthly or yearly interest payment (% of the total) that is given in terms of the yearly rate. The bonds can also fluctuate in value based on the probability that they will be paid back in full.

  • jeff410 9:01 am on October 7, 2009

    Cash flows. Stocks have earnings which increase the value of a company as earnings increase. And many stocks pay some of those earnings out in dividends. Just like any business. Bonds pay interest. Mutual funds are made up of stocks and bonds.