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New money in stock market.

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  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    How much new money enters the stock market daily or yearly? I have searched every now and then for years. No success. Seems to be the most guarded elusive information of all times. Does anybody know or have information about how much new money enters the stock market each year? I have worded the query every way imaginable with no success.
  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    I am thinking this number might be hard to find because it would be just as hard to reconcile it with results.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    It's not a number that is available nor does it really have much meaning. "New money" from where? If someone is selling a house and putting the proceeds into the market is that new money? If someone is cashing in treasury bonds or CDs and putting it into the market is that "new money"? And what kind of market? Just shares? What about OTC hedge funds? Farmers for example put money into derivatives to lock in a price for their crops. Is that new money?

    What about foreigners investing in the US market? The Chinese? Is that new money from abroad or is it just transferring from another account? It seems to me that the number you are looking for is rather meaningless in a global economy.

    If you wanted a ball park yearly average on how much the market has grown from "new money", whatever that is, you would have to compare year to year capitalization and/or volume, but that number alone would not be indicative because of the variations in the year to year share prices and the number of shares. After adjustment for number of shares and share prices you would also have to sum up the individual exchanges. For example, Wikipedia says this about the New York Stock Exchange:

    "The New York Stock Exchange... is the world's largest stock exchange by market capitalization of its listed companies at US$19.3 trillion as of June 2016. The average daily trading value was approximately US$169 billion in 2013."

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    Any money entering the market has meaning because it is an important part of accounting. Your capitalization of the market and comparing it to prior capitalizations is not a good number. One important fact it leaves out is the operating cost of the market. The money invested is not the money of capitaluzation. The operating cost comes out which is a factor of inflation. Also market fluctuations disguise money invested. Another source of inflation or deflation. 3 billions trades a day is directly responsible for daily increases of inflation.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    So you answered your own questions. Why do you need to know how much "new money" is entering the market and what purpose does that serve? And how do you account for the global scale of buying and selling in the US Market?

    FCNN Money: Foreign investors can't get enough of the U.S.

    "The U.S. has clearly emerged as the most competitive and innovative economy in the world," wrote Joseph Quinlan, chief market strategist at U.S. Trust.

    "Here are the numbers: Overseas investors held an all-time high of $6.2 trillion of U.S. government bonds at the end of June and $5.9 trillion of U.S. stocks. The equity holding was just a tad lower than the record of $6 trillion from the first quarter of the year."

    Foreign investors own 20 percent of US stocks and 43 percent of US bonds. How does that figure into your "new money" idea? Is it good or bad in your view?

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    "Why do you need to know how much "new money" is entering the market and what purpose does that serve?"

    Schmidt, With over two billion trades a day does it not appear that the primary business of the stock market might be two billion trades a day and more so the fees for trading and not the profit for the investor. Analagous to a casino benefitting casino owners and not the gamblers/investors. Those 200 million dollar fiber optic cables make more money for who? Cable owners or investors ? I think you are paying a disservice to reality by didsmisding the impirtance of how much new money enters the market each day. It is an elusive number that I cant find and apparently you either. Do you not think it is important to know how much they are charging to run the market?

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    Schmidt, Do you see why it is important to know how much new money is invested in the stock market. I would think that how the operating costs have increased relative to money invested would be an excellent indicator to the future of the economy. Citing how much foreign money is in the market has no more meaning than does the results of a democracy validating the righteousness of a successful candidate. Money is of a single mind and purpose. Profit. Again I call attention to 2 or more billion trades a day. I think there is a great significance to that but since nobody knows how much money enters the stock market it will remain hidden for the time being.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    No I don't see why it's important to know how much "new money" is invested in the stock market. As I said before, the stock market goes up and down as people and firms put money in and take money out for a variety of reasons. How much is new money? Does it make any difference? No. Some of it is short term capital gains (taxed as ordinary income) and some long term capital gains. That's a factor at yearend as people cash out.

    Some shift money in and out of bonds. Some buy and sell gold and precious metals or other commodities and shift in and out of the stock market. As the housing market changes people pull money out of the market to invest in real estate. That helps the economy. Some parents pull money out of the market to pay for their children's higher education. That's a form of investing.

    Companies often buy their own stock when other opportunities to invest are less profitable.

    Auto sales are doing well right now as some of the money is loans, but the down payment most likely includes money from the sales of stocks. That helps the economy.

    Depending on global events foreigners buy and sell in the U.S. market depending on global events like Brexit until they understand the situation better. Americans buy stocks on foreign exchanges just as foreigners buy in the American exchanges.

    And now baby boomers like me are cashing in so we can maintain our life styles in retirement. That actually helps the economy because we spend what we take out of the market.

    So how much "new money" invested in the market versus all the other opportunities to invest doesn't mean diddly squat to me. You are pissing up the wrong tree in trying to read something into it that cannot be measured or quantified in the first place.

  • Strongly Liberal Democrat
    Democrat
    Pensacola, FL
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    Well, I think there is a story in the new money and operating costs. I take it that you are saying it is both too hard to determine and inconsequential.
  • Center Left
    Independent
    Central, FL
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    You obviously did a google search, anyone with a question does that. If you found nothing it would seem that there aren't many others asking the same question.