Economy crash =/= stock market crash?

GSP

InvesterJones said:

FTSE 100 is in the green today, FTSE 250 up 1.73% as I type. Or do we not get commentary on green days?

Seems to be notable movements in just about everything on a daily basis.
All this money lost or down since November, where has it gone? Down a big black hole? Who has got it, or was it never there?

masonic

Type_45 said:

How many times does a bear market come up for air with rallies as it sinks to the bottom?

Large drops like the one experienced yesterday are often followed by a partial reversal. Wouldn't even go so far as to call today a bear market rally. We won't know the bottom even when we see it.

masonic

GSP said:

InvesterJones said:

FTSE 100 is in the green today, FTSE 250 up 1.73% as I type. Or do we not get commentary on green days?

Seems to be notable movements in just about everything on a daily basis.
All this money lost or down since November, where has it gone? Down a big black hole? Who has got it, or was it never there?

The only money gained or lost is by those trading. The movements are the market's best guess as to what assets are currently worth. It would be an error to equate price to value. Assets might have previously been overvalued, and might become undervalued. Each trade involves two parties, and one will tend to get a better deal than the other, resulting in a transfer of wealth from one to the other. Those who facilitate each trade will make some money each time. Meanwhile, those assets are going to deliver fluctuating returns based on the economic conditions and interest rates, changing their intrinsic value.

Money itself is losing value due to inflation and currency speculation, so even this isn't free of movement. It just happens we measure everything else using out local currency as if it were constant.

Linton

GSP said:

InvesterJones said:

FTSE 100 is in the green today, FTSE 250 up 1.73% as I type. Or do we not get commentary on green days?

Seems to be notable movements in just about everything on a daily basis.
All this money lost or down since November, where has it gone? Down a big black hole? Who has got it, or was it never there?

The money never is in the markets.  You buy a share from person A for £100.  -£100 in your pocket and £100 in A's.

You then sell the share for £50 to person B, -£100+£50=-£50 in your pocket, £100 in A's pocket and -£50 in B's pocket.  No net gain or loss, Just a transfer between you, A and B.

If B had been willing to pay £150 you would have made a profit, but you chose to agree to B's offer of £50.

Type_45

FTSE 100 closed down 0.41%.

masonic

Type_45 said:

VWRP closed 4.07% down.

Type_45 said:

FTSE 100 closed down 0.41%.

I can't imagine why you picked VWRP yesterday and FTSE100 today.

Nebulous2

masonic said:

Type_45 said:

VWRP closed 4.07% down.

Type_45 said:

FTSE 100 closed down 0.41%.

I can't imagine why you picked VWRP yesterday and FTSE100 today.

Well - I'm going to put my mouth where my money is.....

I've been building up some cash, mainly in a SIPP, since the middle of last year, and this morning I spent about a third of it on VWRP. 

k6chris

GSP said:

InvesterJones said:

FTSE 100 is in the green today, FTSE 250 up 1.73% as I type. Or do we not get commentary on green days?

Seems to be notable movements in just about everything on a daily basis.
All this money lost or down since November, where has it gone? Down a big black hole? Who has got it, or was it never there?

The money is never there.  The valuation of a company (and so the value of the index they are in) at any time is based on a calculation of the number of shares, multiplied by the value of the last trade (the current share price).  It would clearly be impossible to sell all the shares of a compnay at that 'last trade' value. So when the press says "billions wiped of share index today" it does not mean that #billions# were actually lost, just that a meaningless headline number got a bit smaller. The same nonsense happens when housing markets 'crash'.  Still the same number of houses!

Ho hum.

GSP

k6chris said:

GSP said:

InvesterJones said:

FTSE 100 is in the green today, FTSE 250 up 1.73% as I type. Or do we not get commentary on green days?

Seems to be notable movements in just about everything on a daily basis.
All this money lost or down since November, where has it gone? Down a big black hole? Who has got it, or was it never there?

The money is never there.  The valuation of a company (and so the value of the index they are in) at any time is based on a calculation of the number of shares, multiplied by the value of the last trade (the current share price).  It would clearly be impossible to sell all the shares of a compnay at that 'last trade' value. So when the press says "billions wiped of share index today" it does not mean that #billions# were actually lost, just that a meaningless headline number got a bit smaller. The same nonsense happens when housing markets 'crash'.  Still the same number of houses!

Ho hum.

So if I have invested £100 in a company and it’s price/value falls 50%, and I cash what’s left and I receive £50.
Who’s got my other £50?

Cus

The person you bought it from for £100 and then sold back to him for £50.