Self-Profit
The COVID-19 stock market rally has all our indexes up nearly 100 percent from the low in March, which is crazy to hear. Stocks rarely move that much in a couple of years, and portfolios have been liking it. Many individual investors have seen their brokerage accounts or 401(k)’s double in value, and institutions have had major success with their timing on buying the dip. Even traders have had fun with the big ups and downs every day, with day traders having more possible gains to work with and swing traders catching insane percentages on their trades.
However, it isn’t just investors that are getting gains from the stock market. The companies themselves are profiting too, and not in the obvious way of their business making more money through the economic recovery. This year, U.S. companies have performed 556 stock sales, which is the most since 1996, and the total value of these sales equate to 133 billion dollars. We saw companies like GameStop and AMC sell stock after their share prices exploded, but those companies were close to bankruptcy and their return on those shares were something we’d never seen before. Companies like Zoom and Norwegian Cruise have joined in on the action, selling shares to hold as cash or reinvest into their business. Analysts believe that this is a very smart move because valuations are very high right now, and they expect companies to continue issuing shares as it will bring more investors in. What do you think about this unique method?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
