Why do investors often purchase stocks?

Investors often purchase stocks primarily to increase their wealth over time. When individuals invest in stocks, they are buying ownership in companies, which can potentially appreciate in value as the companies grow and generate profits. This capital appreciation contributes to the investor's overall wealth.

Moreover, while stocks can also provide dividends, which are a portion of a company's earnings paid out to shareholders, the primary motivation tends to focus on the long-term growth potential of the stock market. Historically, stocks have outpaced other investment options, like bonds or savings accounts, making them an attractive choice for those seeking to build wealth.

Other options, such as securing fixed income or minimizing risk, are generally associated with more conservative investment strategies, like bonds or savings accounts, rather than stocks, which are known for their volatility and higher potential rewards. Thus, focusing on wealth increase aligns with the fundamental investing philosophy of capital gains through stock ownership.