Stock Markets - where does the money go?

virenque

So today, every market globally is down. So where does the money go when everyone is selling? Into bonds maybe? Or kept as cash to catch the next big dip in
the market?

Linton

Everybody is not selling, enough people are buying at the lower price to stop it falling further.  Markets will move on fairly small differences between the number of people who want to buy and the number who want to sell.  Generally there aren't large amounts of money going anywhere.

coyrls

The money from the people who are buying is going to the people who are selling.  Where did the people who are buying get their money from?  Bonds or cash maybe?  Maybe.

jimpwarsop

The money isnt going anywhere on traded stocks, if you ignore spread and commission the money from the buyer goes to the seller.  If a stock price is retreating its because (in theory) more people want to sell than want to buy.

Old_Lifer

As Linton says,  there may be a large fall but with very little actual volume of shares changing hands.

Thrugelmir

When trading shares only two numbers matter, the price you buy the stock at and the one you sell it at.  Numbers on paper or on screen mean nothing. Cash will always remain king.

Indexes are made up of many individual daily movements.  Some stocks will rise in price, some will fall, some will remain unchanged. Likewise on some days a high number of stocks may go ex dividend.  A significant movement in a major cap stock may have a far greater influence than the majority of those in the bottom quartile of the index put together. 

Even on days that the market is perceived to have "crashed". Not unusual to find a few outriders bucking the trend. As even in times of turmoil. They'll always be a company or two that will benefit from the economic gloom in some way. 

sevenhills

coyrls said:

The money from the people who are buying is going to the people who are selling.  Where did the people who are buying get their money from?  Bonds or cash maybe?  Maybe.

Since inflation is worldwide, with just an occasional bit of deflation; money is increasing all the time and I am sure our banks will love printing more.

The £2,000 billion in QE in recent years, for example. Will that ever be paid back?

2010

Will all the £billions of covid borrowing by the gov. ever be paid back?

Linton

2010 said:

Will all the £billions of covid borrowing by the gov. ever be paid back?

Why not? The government can always pay back £s which is what the debt is denominated in.  Most Government debt is owned by (and therefore owed to) "us" in the form of the Bank of England and our banks, pension, and insurance companies.

coyrls

sevenhills said:

coyrls said:

The money from the people who are buying is going to the people who are selling.  Where did the people who are buying get their money from?  Bonds or cash maybe?  Maybe.

Since inflation is worldwide, with just an occasional bit of deflation; money is increasing all the time and I am sure our banks will love printing more.

The £2,000 billion in QE in recent years, for example. Will that ever be paid back?

None of that changes the fact the buying and selling shares doesn't create any new money.

ratechaser

coyrls said:

sevenhills said:

coyrls said:

The money from the people who are buying is going to the people who are selling.  Where did the people who are buying get their money from?  Bonds or cash maybe?  Maybe.

Since inflation is worldwide, with just an occasional bit of deflation; money is increasing all the time and I am sure our banks will love printing more.

The £2,000 billion in QE in recent years, for example. Will that ever be paid back?

None of that changes the fact the buying and selling shares doesn't create any new money.

Don't say that, next week is bonus week at my place