if you lose all your money on stocks and shares where does it all go?

Question

my grandfather asked this question.

Answer 1

It's goes to folks like me. :-)

Not to be a smarta**, but I used to be like many others too, losing money to others.

Education is the difference. Learn about the market and get off the bandwagon of following all those horrible cliches.

You don't buy low and sell high. You buy high, and sell higher.

Don't just buy when a stock goes down. Often some of those stocks just go lower!

It's those that learn these things that take the money from those that don't.

What's great is that it's not rocket science, you just need to be willing to learn and actually do so.

Hope that helps!

Answer 2

Shares are, as the name implies, where you own a slice of a company.

If that company does good business, makes profits, and expands, then it becomes worth more - the share price goes up. The money comes from customers, but they're happy too because they're getting good service (hopefully).

If the company does bad business, makes a loss, and cuts back its operations, then it becomes worth less. The money goes on expenditure (maybe on stock, premises, wages, advertising) which it's not generating enough income to cover. Eventually its debts might outweigh its assets, it ceases trading, and the shares are worthless.

But actually most losses are made when expected growth fails to materialise. When the market expects a company to grow quickly, it factors that into the price paid for the shares. If you buy the shares at that high price and the company just does okay, getting by but not taking the world by storm, then the market loses faith and the price falls even though profits may be rising. This is basically what happened when the dotcom bubble burst. There, the money goes to the people who bought the shares at a lower price and sold them at the peak of the bubble. They basically sold you a dream that never came true.

Answer 3

If you think about this logically, when you lose money on the stock market it goes to whoever you purchased the stock from initially.

If I bought 2000 of stock F at 10p, whoever I was purchasing that from would have that money.

If the value of the stock drops it makes no difference as to where the money is physically because the person I bought the shares from would have taken the money and done whatever they have done with it.

A share in and of itself is not money, and is only worth as much as someone else is prepared to pay.

Answer 4

When you put money into stocks and shares you are in effect buying part of a company, and when the company does badly or goes out of business the money you invested in it can't be repaid to you, because the company is then either too poor to make good on its debts or completely benkrupt.

Answer 5

You do hear of some people making a lot of money in "stocks and shares"! The money of losers goes to the winners!

Answer 6

If you pay £2 for a share, that you sell for £1 - then you gave the vendor an extra £1 you didn't need to. So you could say the person that sold it to you.

Answer 7

when you buy stocks, example at 15 per share and price goes down to 14, you lose 1 if you cash it in.............when price becomes 16 , you gain 1 if you cash it in..........
so if you have stocks monitor the prices to see if you are gaining or losing it all

Answer 8

I remember my wifes face, when asking me a similar question,
When I made a substantial amount on the stock market...Where did all this money come from?...who cares just you keep stacking it it the corner.......Lol

Yada! above has the right idea.

Answer 9

If the loss is due to market fall, it does not go anywhere. If the loss is due to fluctuation of price of scripts, it goes into the hands of other buyers/sellers of the script.

Answer 10

Into the pockets of the sharks who conned you into buying shares.