Tulip bulbs became popular, speculative buying increased demand, and an insane price spiral resulted. The spiraling pricing could not go on indefinitely. At some point folks would realize that it was after all just a tulip bulb. The prices crashed and threw Holland into a long economic depression. I n summary, stocks represent ownership of a company.
Investors can make money by receiving dividends or by realizing gains in stock price.
Conversely, an investor can lose money if the stock price goes down. Companies do go out of business, and stocks can become worthless. All rights reserved.