The share market is a great place to generate wealth, as profitable companies pay a stream of growing, tax-advantaged dividends, and compound the growth of their retained earnings to produce capital gain.
Of course, it is also possible to make a capital loss.
Take surfwear group Billabong. It was floated in August 2000 at $3.15 a share, raising $295 million. Seven years later, when Billabong’s shares touched $18.51, the company was worth $4 billion.