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Stock Markets - where does the money go?

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  • maxsteam
    maxsteam Posts: 718 Forumite
    500 Posts First Anniversary Name Dropper Photogenic
    virenque said:
    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?
    Not everyone is selling. For every seller, there is usually a buyer. What changes is the price that people are willing to trade at. There is a lot of money from inexperienced investors in the markets at the moment which makes a lot of the swings unpredictable. Few people would have expected all-time highs at a time of so much uncertainty. A 1% change in indices each day is very common and the change cannot always be in the same direction. There will be much bigger swings ahead.
    I can certainly answer the question from a personal point of view. I am slowly switching into cash and trying different strategies with traded options to, hopefully, take advantage of some of the swings. But, when I sell, someone else buys. I don't want to get involved with panic buying or panic selling.
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