Perhaps the most popular reason why people invest in companies is to earn a return on their investments, also known as profit. Investments made through the purchase of stocks and bonds or by extending a loan are expected to provide the owner passive investment income and capital appreciation at a rate that exceeds the rate the owner would earn through safer or more traditional ways of putting his money to work, such as by keeping money in a savings account or buying a piece of real estate.
Influence
Investing in a company by buying shares of common voting stock gives you an ownership interest in the company and a right to influence its affairs. Individuals and other entities can make a strategic decision to purchase available shares of stock of a public corporation that will give the investor the right to vote at shareholders meeting and potentially affect management decisions and appointments to the board of directors.
Anticipated Advantages
Occasionally, an investment in a company is justified by future expectations of the company's evolving competitive advantages. A company might be expected to gain an advantage over competitors through the development of a new product, control of crucial intellectual property or by cornering the market in a critical industry resource.