Magic buffs damage for magic based damage (both weapons and magic). Every magic spell is based off the magic stat (except for the buffs). Faith, same concept applies except for faith based weapons get more powerful and miracles benefit (healing and God's Wrath).
It is best to focus on one or the other. I personally choose magic because of shear damage and usefulness in battle (God's Wrath, a miracle, takes 2-3 seconds to cast while magic takes at most half a second for the strongest spell). There are also many more magic boosting items then miracle/faith boosting stuff (3 magic boosting items and only 1 miracle boosting).
In general the reason you want to concentrate on one stat is because that will be your strong point. Once you get really good in the game you start being able to do be all around even though you have a strong point. But remember all builds have weakness, especially people who focus on all around characters, their weakness is every specialized character.
PSN: Boomkick
Characters:
Insanity- Soul Level 157.
Valkyrie- Soul Level 107, 1-4 Blue Phantom Helper, 4-1 Black Phantom Farmer.
Assassin- Soul Level 82, Running through game Co-op with Shimizoki.
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