The rewards of owning shares that you won’t spot on a price chart

Ask anyone about making money in stocks, and they’ll probably say – buy cheap, sell high

That’s true – but it’s only half the story.

The other half?

Sometimes, the firm itself decides to give you money – even if you never sell your shares.

Sounds too good to be true? Let’s break it down.

THE FIRST REWARD – DIVIDENDS

Imagine you own a small cake shop with a few friends.

At the end of the month, after paying expenses, there’s profit left.

You might choose to put all the profit back into the cake shop, or hand some of it over to the people who helped build it.

That’s exactly what a dividend is.

DEFINITION IN SIMPLE WORDS

A dividend is a part of a company’s profit given to its shareholders.

Why companies give dividends: It’s a way of saying “Thankyou for believing in us.”

What it means for you: You get paid simply for holding the shares – without selling them.

For Instance: If you hold 100 shares of a company that declares a Rs.10 dividend per share, you get Rs.1,000 credited directly to your bank or trading account.

WHY DIVIDENDS MATTER

These Dividends aren't just a complimentary - that's a positive sign.

When a company releases continuous dividends - it is a good sign for it has smooth profits and good health financially.

For long–term investors, these small payments add up over time and can even be reinvested to buy more shares, compounding your wealth.

THE SECOND REWARD – BUYBACKS

Now, let’s switch the example.

What if that cake shop decided it wanted to own more of itself? It could offer to buy your share back at a good price.

That’s what a buyback is.

DEFINITION IN SIMPLE WORDS

A buyback is when a company buys its own shares from existing shareholders.

WHY COMPANIES DO BUYBACKS:

• To reduce the number of shares in the market (which can make each remaining share more valuable).

• To use extra cash efficiently when there aren’t better investment opportunities.

HOW A BUYBACK WORKS

• The company comes out with an announcement sharing how much they’ll pay, how many shares they’ll buy, and when it’s all happening

• If you own shares, you can choose to give them in the buyback.

• If accepted, the company gets back them from you and pays directly to your account.

For Instance: If the CMP is Rs.750, and the buyback price is Rs.800, you can sell your shares directly to the company for a higher rate than the market.

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WHY BUYBACKS MATTER

Buybacks can be a quick way for investors to get a premium price for their shares.

It’s also a sign that the company is strong and undoubted in its own thing – it’s literally investing in itself.

HOW YOU GET THESE REWARDS

The 'something-good-to-hear' is – you don’t have to fill complicated forms or call anyone.

DIVIDENDS: If your shares are in a Demat account and your bank details are linked, the money will land in your account automatically.

BUYBACKS: Your broker/trading platform will notify you about buyback offers, and you can apply directly through them.

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WHY THESE REWARDS ARE IMPORTANT FOR YOU

For an investor, stock market returns aren’t just about share prices going up.

Dividends and buybacks add an extra layer of income and opportunity, making your investment more rewarding over the long run.

It’s like buying a plant: you hope it grows in value, but along the way, it also gives you flowers and fruits.

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FINAL THOUGHT – MAKE THE MOST OF BEING A SHAREHOLDER

The stock market isn’t only for traders chasing daily price moves.

It’s also for patient investors who enjoy these additional rewards that come with owning a piece of a good company.

At GoPocket, we believe in helping you explore every angle of investing – from understanding market trends to enjoying the hidden benefits of dividends and buybacks.

Because when you know how this works, you don’t just invest – you grow wealth smartly.

DISCLAIMER:

The information provided is for educational purposes and should not be considered as investment advice. Talk to a financial advisor before starting your trading journey to make it a smooth and a better one

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