Where does the money go ?

[muundoggie]

My investor friends don't seem to be able to answer this question.
One of my friends has invested $50k
Now he says he lost it all.
Where did the money go to? Who's pocket/account did the the money end up in?

[nodoodahs]

If you buy a house for a million, the money goes to the seller when you buy.

It doesn't matter, as far as the money is concerned, what happens to price of the house afterwards. The money has already changed hands.

Don't confuse the marked to market price of an asset with currency.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[lewie2004]

If you buy a house for a million and now it is worth 500,000. where does that money go? It vanishes into the night....

[nodoodahs]

I don't know what he "invested" in, but here's the money trail.

When you buy something, you lose 100% of the purchase price, immediately, in terms of money, with it going to whoever sold it to you.

We like to PRETEND that we have $100,000 or whatever "in the stock market" but in reality the money went to the sellers when we bought, and we're just marking a position to market price, based on a quote machine.



Now the people that he bought from may have used that money for other stuff, etc. You'd need to be more specific for a more specific answer. The money itself changes hands at settlement – when bought for stocks, when delivered for futures, at expiry for options, etc.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.