But both dividends and stock buybacks are terrible and really shouldn't exist. In a proper market, competition is so fierce that you cannot afford dividends / stock buybacks because your competitors will put all their money towards R&D and retaining & attracting the best personnel.
Then again, this has been going on for decades. Businesses used to be about being the best for your customers and personnel. But it's all become about sticking it to everyone for the benefit of the shareholders.
>The return is in the increase in value of the stock?
There will never be an increase in the value of the stock if there is no expected return.
If you go back to the 1600's then shareholders got their return from liquidation payouts. Someone would invest in a voyage and when the ship returned the spoils were the paid out and the company was liquidated. Not so different from a dividend really and it clearly wouldn't work for a modern industrial economy.
Ideally, people wouldn’t have any money to invest because they all earn the same amount, which they all spend on the same expenses, otherwise it gets taxed and redistributed.
