Stock Investing

When considering stock investing, do you ever stop to think where this system of financing comes from? And do you actually buy something, anyway, when you purchase stock?

It wasn't until 1602 that stock investing started looking like it does, as we know it today. The Dutch East India Trading Company issued shares of stock to help finance the building of ships to support their worldwide trade network that was quickly encircling the globe. For almost 200 years, until the company was dissolved in 1800, the stockholders of the Dutch East India Trading Company enjoyed dividends paid at the handsome rate of 18% per annum on average.

By pooling the relatively small investments made by many individuals, the Dutch East India Trading Company amassed a pool of capital that was so enormous it catapulted The Netherlands to superpower status over the seven seas and each shareholder became joint owner of the ship he invested in and the profits (or losses) from its voyages. Until this time, only very wealthy individuals or families could afford to privately invest such enormous amounts of money. Other ventures were government funded.

Those first investors were buying part of a merchant ship with their stock investing dollars. Today, the sky's pretty much the limit. Airplanes, radio companies and satellite dishes are all part of our world because of stock investing. So are paper clips, the newest vaccine, the clothes you wear, the car you drive, and the food you eat.

Have fun with your investing portfolio. Merchant ship or rocket ship, it's pretty satisfying to know you own a part of it all.