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
The person selling is making a profit if they bought at a lower price. The person buying is thinking they will make a profit in the future when they sell, or via dividends. They aren’t making money in that moment. But there’s no reason to think either of them is a loser. It’s not a zero-sum game.
The person who sold might have gotten the stock a long time ago and it increased in value well, so they make money. The person who bought receives an item that is worth the amount they spent, so they didn’t lose money. Even if the stock price goes down they haven’t lost money, although their worth has decreased. The stock can increase in price and the buyer can then sell for a profit. And then later that buyer could sell for a higher price, and so on. It’s only really a loss if you sell at a lower price than what you bought.
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