Sure, but that's pretty indirect and a far cry from "putting the money to productive use." Unless you're an early investor or IPO participant, your actual money is not being directly put to productive use by the company you are "investing" in.
Sure, but that's pretty indirect and a far cry from "putting the money to productive use." Unless you're an early investor or IPO participant, your actual money is not being directly put to productive use by the company you are "investing" in.
> that's pretty indirect and a far cry from "putting the money to productive use."
All finance is indirect. Particularly at small scale.
> Unless you're an early investor or IPO participant
Plenty of IPOs are entirely secondary. And public companies regularly raise money via at-the-market offerings, where a random trader may wind up cutting a cheque to the corporate treasury. (I’ve been a seed investor and IPO investor. My effects on the outcome were rarely singularly meaningful.)
In a large offering, a small IPO investor has about as much direct effect on the outcome as someone buying the pop publicly. In aggregate, however, their actions are meaningful and productive.
Put another way: contrast two economies, one in which most capital is tied up sports gambling (negative-sum game), the other in which it’s in equities (positive-sum long term), one will outperform the other.
Early investors and IPO participants put their money in expecting that 20 years later you would buy the stock off their hands. It feels weird to call it causation when it's traveling back in time, but in a way buying the stock contributes to investment.