When stocks fall where do the money go?

The money evaporates...

EXAMPLE:

You bought something at $100.

Today no one wants to buy it from you, because they perceive the value to be less than $100.

So you finally sell it for $60.

You lost $40, but the lost money went nowhere.

It is like depreciation on a car.

Who is getting rich?

A bunch of over-paid, over-bonused, golden parachuted company CEO's and executives.

Why does it happen?

Greed, and incompetence.

When a company sell stocks lets say for $100 each, this is better than having to go to the bank for a loan all the time. Then if the company has a slow year and he is paying high wages, bonuses and benefits to his employees then he needs money quick. The company can lower the price on the stock quickly lets say by 25%. Any stockholder that had money above $75 would lose it to the company and the business keeps it. It a rich man s game and you are the loser every time. That is where the money goes. The Rich tricks the stockholder again and again. Its like free money growing on the tree.

The price of a stock is determined by the amount of gross sales/net

profit that a company makes. If the company is continually making more sales And the net profit keeps going up - then the Value of the stock keeps going up And is told in Dollar amounts. If the company

has a bad/loosing quarter then the Value of the stock goes down and

is told in a smaller Dollar amount.

The money doesn't go anywhere - It's the Value of the stock that goes

up or down. At the start of the year your 401k had a certain Value that

was stated in Dollar amounts - enough 401ks went down in Value so

the loss was stated in Dollar amounts.

Do not confuse Value with money. Value is what determines what the price of the stock will be worth.

When you drive a brand new car off the dealers lot - that car will loose

Value instantly, but there is no money lost from your checking account, or pocket book.

the money vanishes. if there are shorts then the ownership of the company is over 100%

think about this situation. yahoo has earnings at night after 8pm. the next day the stock opens 50% less. not one share has been traded, so no transfer of wealth between people.

The people who anticipate of it falling and lockin to ride the stock down are called shorts.They gain while the stockholder loses.

IT GOES TO THE OWNERS OF THE COMPANY WHO GET RICH OFF OF PEOPLE INVESTING IN THEIR SCHEME ! BACK IN THE GREAT STOCK MARKET CRASH, THE BILLIONS OF DOLLARS INVESTED DID NOT JUST VANISH ?? THE BILLIONAIRES WHO STOLE THE MONEY WANT YOU TO BELIEVE THAT MONEY JUST VANISHES INTO THIN AIR=REALLY !