When the stock market plunged, the stock price fell. In the final analysis, this kind of stock is the ownership certificate issued by the joint-stock company, and the shareholding certificate issued by the joint-stock company to each shareholder provides a valuable thing for raising funds and obtaining dividends from securities. Each stock represents a listed company, and usually the ownership of the company represented by each stock is equal. In the stock market, stock price fluctuation is normal.
If we want to know where all the money went when the stock market plunged, we must know how much the stock rose. We say that the normal stock value should come from the company's equity and dividends, which is why we invest in this company. In domestic A-shares, everyone calls it investing in stock trading, which shows that the domestic stock market is actually abnormal, while dividends think that stocks should have been placed in a secondary position, and the main position is the price of the stock itself.
Supply and demand determine prices. When there are more buyers, the price will go up, and when everyone wants to sell stocks, the price will drop sharply. From this perspective, the value of the stock itself has not changed, but the psychological state of investors or stock speculators has changed. In this case, if you want to make a large number of transactions quickly, the buyer must raise the purchase price and the stock price begins to rise. However, in reality, the value of the stock remains unchanged, and the reason for the rise of the stock price is only the change of supply and demand and the herd mentality of investors. How to calculate the value of stocks, you will understand it after learning it before.
In the face of a sharp decline, we often hear how many trillions of market value have evaporated in the stock market recently, or a stock has been negatively affected, falling for a few days and evaporating hundreds of millions of market value. In fact, the word evaporation is very interesting and artistic.
Let's understand how the market value of the stock market has increased. That is to say, after the stock market has the effect of making money, all kinds of funds have entered the market to trade stocks, even foreign hedge funds such as QFII and RQFII have also entered the market, and a large number of enterprises around the funds have also entered the market to buy stocks, thus pushing up the stock price. When the stock price is pushed up, it will be multiplied by the total share capital, that is, the market value of individual stocks. The total market value of A shares is the data obtained by multiplying the number of outstanding shares of all listed companies by the current share price.
When the stock price or stock market falls, it is usually retail investors who enter the market and institutional investors leave. So retail investors bring money into the stock market to buy stocks, but at the same time, the other party will definitely buy your stocks, and he will withdraw the money. Of course, the funds invested by retail investors will not disappear, but will be taken away from the stock market by others. However, after the retail investors entered the market, they held the original shares, but in the stock market, the original shares happened to plummet, and the value of the shares in the hands of retail investors also shrank.
Where will the stock market crash go?
First, major shareholders reduce their holdings. The major shareholders of listed companies are usually very aware of the actual value of their shares. When it is found that the stock price has risen a little and the market is excited, major shareholders may reduce their holdings in the secondary market. What needs to be known is that the cost of holding shares by major shareholders is very low, often only one or two dollars. Selling tens of dollars in the secondary market will naturally be taken over by retail investors. If the stock market falls later, the evaporated market value is the money that the major shareholder reduced his chips and converted into cash.
Secondly, prescient investors or large-scale investors pushed forward the layout at a low level in the stock market, and now the stock market has risen to a high level. They believe that there is little room for market prospects to rise, but risks are coming quietly. They must cash in the floating profits on their books in time. Of course, before cashing in the floating profit, it can't be considered as making money, but after investing the chips in the next home, such a prescient investor can be considered as safe. The market value exists, and the stock market evaporation is mainly taken away by this group.
Moreover, institutional investors have been pushing up their brokerage stocks, big financial stocks, liquor stocks and technology stocks, while retail investors have all taken over, allowing institutional investors to ship at high prices and reduce their positions. Therefore, to a large extent, if A shares fall, the market value will be converted into cash by the high shipments of major institutions and put into the pocket.
Finally, the evaporated market value of the stock market also flows to the trading commissions of securities companies and the stamp duty levied in State Taxation Administration of The People's Republic of China, China. In the stock market, securities companies, exchanges and tax bureaus all earn huge commissions and taxes.