<p>I am having trouble understanding stocks, here is my question:</p>
<p>So I understand that stocks rising in value are worth more, etc. What I am having trouble understanding is, say a person buys some stocks one day using 50 dollars. Then, later, they all go up in price. Great! They are worth more! Now this person has more money (in assets). Okay, so now this person wants to invest more because investing more and buying new stocks or more of the old stock = more money.</p>
<p>So how does this person invest more money and buy new stocks if all the money made (let's say +150 dollars because it started as 50 and became 200) is tied up in those old stocks that have gone up in price. Without selling these current stocks that have shot up and that this person owns, where does the person get more money to invest?</p>
<p>Basically, if I start with say, 100 dollars, and I invest it and somehow make it worth 120 dollars (in stock value), and I want to invest in more stocks (more of the old or some new ones) to make more money, how could I buy more if, even though I have more "money", I can't buy any more stocks with it because all of this money I now have (the $120) is tied up in the old stocks.</p>
<p>Do you get what I am asking?</p>
<p>Everyone builds up wealth starting small and reinvesting, but I do not see how one can do that without selling old stocks. I feel like it is done all the time, though. Because I am pretty sure people don't just sell all the time?</p>
<p>Thanks.</p>