Why Equities?

Products & Services

Equities, shares, or stocks are more than just symbols; they represent ownership in companies. Companies propel society forward by creating the goods and services that make modern life possible. Bringing new products and services to the market is one of the most critical activities companies use to create employment, shareholder value, and economic growth.

New products and services can also give rise to entire industries. Google Maps, for instance, was an essential precursor to the development of Uber, Lyft, and many other applications; a multitude of companies’ services, including Netflix's services, are inextricably intertwined with Amazon's AWS servers.

Efficiency & Innovation

Since companies are only limited in scope by the capabilities and imagination of their leaders and employees, their potential for growth as investments is unparalleled. Unlike investments in real estate, commodities, and fixed-income products, they can create value by re-imagining how things should work and making ideas come to life.

In addition, companies can create value by delivering their products more efficiently, improving processes, reducing costs, and implementing efficiency-enhancing technologies.

Expansion & Acquisitions

Companies can expand to new geographic locations and create new markets by inventing products and services people did not know they needed. Unlike direct investments in real estate, companies can use profits to grow physically by acquiring properties, land, and equipment. They can also create synergies, diversify product lines, and increase market share by acquiring competing and complementary businesses.

Share Repurchases

Companies can return capital to investors by buying back their shares. In the absence of better investment opportunities in capital expenditures, acquisitions, and patents, companies can use profits from operations to repurchase their shares in the open market. This mechanism is often used by market-dominant, mature companies that have saturated the vast global market.

Reducing the number of outstanding shares increases current shareholders' ownership percentage. By increasing nominal amounts for metrics like revenues per share, book value per share, and earnings per share (EPS), share repurchases can translate into higher share prices.