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Money doesn't go into the stock market. If you buy a stock from me today, I can use the exact same money to buy bread tomorrow. That money keeps circulating in
by peterisza 4y ago
Money doesn't go into the stock market. If you buy a stock from me today, I can use the exact same money to buy bread tomorrow. That money keeps circulating in the economy, it doesn't go into or out of the stock market.
- nly 4y agoExactly. The current stock price is just the last price it traded at, or some measure of supposed liquidity or depth in the market at some price. That liquidity just exists as unfilled orders or quotes on the order book on an exchange and can vanish in an instant. The other thing is that buying stock for a company A isn't the same as "investing in" company A, since company A doesn't get your money...it's a secondary market! As buffet says, the stock market is a voting machine in the short term and a weighing machine in the long-term.
- imtringued 4y agoIt circulates in theory. In practice people keep saving ever greater amounts of money.