if every stock transaction has a buyer & seller, does that mean 50% of the people will always be losing money?

Question

I just got into the stocks market. AFAIK every transaction must have someone selling and someone buying, both thinking that they will be making money. How can both be making money?

Does that mean at least half of everyone in the stocks market will have to be losers?

In: 97

Answer 1

Yes, it does mean that.

But only relative to the average growth of the market. If the marked is up by 5% a given year, you can buy an index fund (or just a random variation of stocks) and expect close to 5% return.

For the people who keep trading throughout the year, about half will get returns below 5% and half will get returns above 5%.

So if you are not better than the average (by value, not by the number of traders), you should stay away from manual trading.