If you have read any of my posts, you will know enough about me to understand my level of market and financial knowledge is not at a professional level. That’s why I’m so curious and hope others are willing to share a little.
Are you also one of the millions wondering why the stock market fell over three days of trading? I’ve read many explanations of why, but I also really want to know how.
Investors are fleeing the market due to lack of confidence in the market: Really? Suddenly all those investors just decided to do this at the same time? The rating downgrade by S&P scared the investors: The decline started before the rating announcement.
The major thing I know from the news reports is that the value of the market fell approximately three trillion dollars in three days. That’s $3,000,000,000.00 missing. Where did it go?
If you look at the individual stock prices, most seem to have lost 5% to 10%. Now, it is difficult to believe that all investors sold their stock for what they paid for it – and simply put the cash into other accounts. If that were so, individual stocks would not have fallen, would they? The value of a lot of retirement accounts (401k’s and IRA’s fell) even though they were not cashed in. If a person was in the process of taking distributions on those accounts, they lost money.
Primary fact – basically a stock transaction in the market requires a buyer and a seller. The difference between the purchase price and the selling is in that $3T. Who uses short-selling, and what was the amount of profit taken from the market for those transactions? Who has a list of the top 200 profit-takers, and how much did each gain?
That’s not all my questions – but enough for now.