When I am buy stock at a lower price point than it was trading a 1 day or week, month or year later, does it mean that somebody during that same time frame is losing the difference?
In: Economics
Not necessarily.
The *total value* of the stock market goes up over time – this is a reflection of the fact that the economy is not zero-sum.
However, the shorter the window between a purchase and sale, the closer it will be to zero-sum.
Basically, if you make money in the stock market from long-term investment, it’s probably mostly from general value growth. If you make money from rapid same-day trading, it’s probably almost entirely from other people losing money.
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