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Money doesn't sit in the stock market. Value, sure, but the money goes right back into the economy.
by abbycurtis33 1y ago
Money doesn't sit in the stock market. Value, sure, but the money goes right back into the economy.
- dismalaf 1y agoMoney only goes to the company to get reinvested when the company sells shares, so at IPO time, when an insider sells, when more shares are issued, etc... Otherwise, it's one asset holder selling to another asset holder, usually at ever increasing prices. So yes, a lot of money is simply sitting in the stock market. Now, some does come back in the form of share buybacks and dividends. That being said, the average dividend yield is significantly less than the long-run average (it's less than 2 percent right now, long term average is above 3%).
- robjan 1y agoWhen I buy a stock the seller gets the money. The money doesn't "go in to the stock market".
- Ekaros 1y agoQuestion really comes to what does the seller do with that money? Buy some other stock? Buy some other asset. What fraction they actually spend to buy goods and services?
- deleted 1y ago[deleted]
- mathiaspoint 1y agoThe secondary market drives the primary market.