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Sure, maybe Bob buys a share from Sally for $11. Then Charlie buys a share from Sally for $12. Then Darrel buys a share from Sally for $13. In this situation,
by tedsanders 9y ago
Sure, maybe Bob buys a share from Sally for $11. Then Charlie buys a share from Sally for $12. Then Darrel buys a share from Sally for $13.
In this situation, there were 3 buys and 3 sells. $11+$12+$13 flowed into the market while at the same time $11+$12+$13 flowed out of the market. At the end of the day, even though the share price rose, there were an equal number of buys and sells, with equal inflows and outflows.
A higher stock price does not mean the company has more dollar bills in its vault and investors have less. A higher stock price means that stock traders in aggregate now think the company is worth more.
Cash flows through markets, it doesn't flow into markets.
(Technically what this means is dollars are not 'invested in the stock market.' People are not investing 'more.' Prices going up does not mean more money is being invested in the stock market.)