Stock Markets Exposed

If most people are making gains on the stock market, where is the money coming from?

Say the stock markets double in value over a year.. where does the money come from? Who is losing money? It's a hypothetical question. Similarly, if the stock markets crash big time, where does the money go? Who is making big gains when the markets flatline?

Public Comments

1. value of stock is present value of all future dividends, which presumably come from future earnings. whenever someone buys a stock, someone is selling it for like price (less commission, etc) so in that sense it is a zero sum game.
2. This is kind of a strange question to ask if you know how the stock market works. It doesn't make sense because there is no real money being lost if the stock market doubles in value. In the market, you don't have to have a loser to get a winner....It's difficult to explain. If you buy the share at $2 and someone is willing to buy it for $4, you have made $2 but that doesn't mean the person who bought it lost $4 since he now owns something that other people are willing to buy at $4. If something happened so that others were no longer willing to pay $4 but only $3, then the person owning the stock would have theoretically lost $1.
3. Foreign investments