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Does the stock market create any sort of value?
I probably don't understand something. I think you are correct about that.  :) The main way money enters the stock market is through investors investing and taking money out. Money doesn't exactly "enter" the stock market.  Shares of stock are bought and sold by investors to investors.  The market is just a mechanism for a buyer and seller to find each other. For the purposes of this question, we will only consider non-dividend stocks. Okay. When you buy stock, it is claimed that you own a small portion of the company. This statement has no backing, as you cannot exchange your stock for the company's assets. For example, if I bought $10 of Apple Stock early on, but it later went up to $399, I can't go to Apple and say "I own $399 of you, here you go it back, give me an iPhone." The only way to redeem this is to sell the stock to another investor (like a Ponzi Scheme.) It is true that when you own stock, you own a small portion of the company.  No, you can't just destroy your portion of the company; that wouldn't be fair to the other investors.  But you can very easily sell your portion to another investor.  The stock market facilitates that sale, making it very easy to either sell your shares or buy more shares. It's not a Ponzi scheme.  The only reason your hypothetical share is said to be "worth" $399 is that there is a buyer that wants to buy it at $399.  But there is a real company behind the stock, and it is making real money. There are several existing questions that discuss what gives a stock value besides a dividend: The stock market goes up only when more people invest in it. Although the stock market keeps tabs on Businesses, the profits of Businesses do not actually flow into the Stock Market. In particular, if no one puts money in the stock market, it doesn't matter how good the businesses do. The value of a stock is simply what a buyer is willing to pay for it.  You are correct that there is not always a correlation between the price of a stock and how well the company is doing.  But let's look at another hypothetical scenario. Let's say that I started and run a publicly-held company that sells widgets.  The company is doing very well; I'm selling lots of widgets.  In fact, the company is making incredible amounts of money.  However, the stock price is not going up as fast as our revenues.  This could be due to a number of reasons: investors might not be aware of our success, or investors might not think our success is sustainable.  I, as the founder, own lots of shares myself, and if I want a return on my investment, I can do a couple of things with the large revenues of the company: I can either continue to reinvest revenue in the company, growing the company even more (in the hopes that investors will start to notice and the stock price will rise), or I can start paying a dividend.  Either way, all the current stock holders benefit from the success of the company.