I want to understand better cash flow of stock market and it's participants, but could not find any reasonable information online, hope more experienced people here could help.
Money IN flow:
- (1)investors, hedge funds, investing banks, pension fund etc... anyone who invests/speculates on stock price
- (2)companies paying dividends on their shares
- (3)acquisition. When someone decides to buy public trading company they will return full cost to the market/shareholders.
- (4)stock buyback
Money OUT flow:
- (5)IPO. On time off outflow.
- (6)share dilution.
- (7)brokers, market makers, stock exchange support etc..
- (8)speculative profit for category (1)
I hope I did not forget any, please let me know if I did. Now we know there should be balance and inflow should be equal to outflow on long term. The question here - is (2) - (4) enough to cover income for (5) - (8)? I don't have statistical information but my guess would be no, does it mean that category (1) is constantly loosing money?