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.
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.
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.