In the world of business, there are some reasons why some people buy the stocks. The people usually buy the stocks mainly because the economic reason. The economic has the high rate in the reasons of why people gain or purchase the stocks of the company. The gain or the return from the company stocks divided into two parts: the dividends, the periodic payments from the company to the owner of the stocks that made from the company’s profit, and the appreciation, the capital that gained from selling stocks for the original purchase price of the stocks.
The investors usually have only to choice for obtaining the stocks or some financial assets of the company, buying the stocks or using bonds system. The bonds system is the interest-bearing loan. The bonds system make a company typically promises the investor that the company will make some periodic interest payments to the investor, lender, or beholder as well as pay back the amount of the bonds when the term of the bond expires. The bonds are evidence of loans while stocks are evidence of ownership. The bonds system is safer investment than stock, especially in the deflation time, the period when the price of goods and service are generally falling down. But, the stocks also a good investment during the inflation periods, the period when the price of goods and services are generally rising, because they represent the ownership assets that probably will rising also as fast as or may be faster than the general goods and services prices. The bonds have fixed the money value, they can’t increase or rising as stocks price when inflation happen.