What happens when companies buy themselves back?

Share buybacks — when companies buy back their own stock —  effectively reduce the amount of a company’s shares on the market. Fewer shares lead to more value per share, boosting the stock price and creating higher demand for the stock. Chief Investment Strategist for IG Wealth Management, Philip Petursson, explores the potential impact on the markets of the U.S. government’s proposed 1% tax on stock buybacks.