What happens if i put 100 dollars in a stock and the market goes down.?

Question

Lets say it goes WAY DOWN. Will i lose my 100 dollars only or will they take away money from me that i haven't invested (like from my bank account for example). I have always wanted to know this answer. If the market crashes will i lose ALL of my money that i've worked for or just the money i have invested in a stock.

Answer 1

Normally if u have invested in a good stock them max u may loose 20 to 30% but u will not loose ur entire money.and what ever u will loose it from the money u have invested in.

Answer 2

Depends on the stock there are thousands of stocks out there to choose from. The so called "Market" usually refers to the DOW, Nasdaq and the S&P 500. The Dow consistis of only 30 stocks. The Nasdaq has over 3000 stocks listed, and the S&P 500 have the top 500 companies listed. So you really can't put 100 dollars down on the market like a sports bet.

Save your money and build an investment portfolio, study stock trends, analysis, tendencies and lingo. These guys all have their own lingo. If you just jump in you might get lucky and do fine but its better to know how deep the water is first.

Answer 3

What matters in this case is not what the broader market does, but what your stock does. If your stock's trading price declines, then the 100 dollars you invested will yield a net negative return if the shares are sold (i.e. you "lose" money when selling). If the stock price holds steady or rises you will have "made" money, but it is all really academic until you actually sell the shares themselves. Stock prices rise and fall pretty regularly and a stock woth $100 a share today could be 95 the next week and 102 the following week, etc. Don't forget that you will pay capital gains tax on any earnings from share sales. Essentially the stock market is about making bets with your money on a company's short or long term performance. The market plays a role in that your company will be compared against others in its industry in terms of financials, market share, etc.

Answer 4

Think of it this way:

When you buy stock in a company you are buying a piece of that company. Therefore, when the company makes money the stock should go up(more people want to own a finite number of stocks). When the company does poorly the stock usually goes down. But, the stock can only go down to zero. Therefore, you can't lose anymore than your investment. So, the most u can lose in this case is 100 dollars. Investors are only liable for their share of the company. I would suggest that you stay away from individual stocks and go with mutual funds thus spreading your risk. Mutual funds are run by managers. Your 100 dollars, and any more you wish to invest, goes into a general fund with tons of other people. With that kind of buying power, you can own shares with 100s of companies. The managers pick the companies-they spend their lives researching companies. Your profits may be smaller in the short term. But, studies have shown that long term investors make more money than investors that jump into and out of different stocks. Hope this helps.

Answer 5

Hello,

My name is John and I'm an active investor. I had this question when I first started investing too.

Fortunately for everyone you can't lose more than you invest unless you buy your stock on credit (EX: taking out cash on your credit card to buy stock, or buying stock with loaned money.)

If you bought stock in a company that goes bankrupt and has massive debts you as stock owner are not liable for that company's debt.

If the market crashes you could potentially profit. Let's imagine you invested in a company that shreds stock certificates and the government says that whenever a company goes bankrupt all stock certificates issued by must be shredded by the company you've just invested in. In all likelihood, the market crash would benefit your stock holdings and while the rest of the markets are crashing your stock would be soaring because you stand to profit from every company that crashes.

The stock market is a strange place, I found these sites helpful when I started out:
http://investopedia.com
http://investingsensei.org
http://barchat.com
http://finance.yahoo.com
http://cnn.com/money

Graciously
The Investing Sensei
http://www.investingsensei.blogspot.com

If you have any other questions, comments, or concerns you can contact me at:

My Site: http://investingsensei.org
Email: [e-mail]

Answer 6

You may not lose anything. Stocks usually go down when the market goes down -- but not always.

The most you can lose is everything you invested -- unless you buy on margin (you are allowed to borrow 50% of the value of your portfolio to purchase more stock). If you bought on full margin, the most you could lose would be twice your investment.

Back in the 1920s, you could buy $1000 worth of stock on your $100 investment -- which is why so many people went bankrupt when the market crashed. They lost ten times their investment.

Answer 7

100 dollars only.

The only way you can lose more than that is if you buy the stock on margin, or use calls and puts or other more sophisticated devices. So long as all you do is buy shares in the stock, your exposure is limited to the value of the stock.

Answer 8

The most you will loose it $100.
If you do it right though, you wont loose. Just take your time and make good decisions when picking a good stock. Don't buy a stock that is going under.

Answer 9

U mean to say, on General public... The effect will b very slow ie., on general commodities n other things. Mainly,the the Share holder's money-invested in the Companies sees the direct impact of Global/ indegenous markets..n reflects directly.