stock market is an exchange, so for every dollar flowing "into" stocks, there is a dollar flowing out. For every buyer, there is a seller.
In which case, what possible usefullness can one obtain from counting buyers but ignoring sellers?
In which case, what possible usefullness can one obtain from counting buyers but ignoring sellers?
In fact these transactions have little to do with the real economy at all, they are merely pricing assets. You can buy and sell something 100 times or 10,000 times and none of that will have any bearing on the real economy or even on things like inflation.
The chart in the original article is of Annual Equity Fund flows, which are net values _considering both sides since it includes negative values_ -- a measurement of this supposedly nonexistant flow. While money remains constant from a trade, the stock of equity (in both senses of the term "stock") changes.
For every buyer, there is a seller. If you bought for $1, then other market participants sold for $1. If you sold for $100, then other market participants bought for $100. If money in your account went up, then money in other market participants accounts went down. The money went through the market - it didn't come "from" the market.
*obviously the story gets more complicated with dividends, shorting, share issuance, buybacks, etc. but the principle remains the same
Very often you cannot reason about the aggregate the same way you reason about an individual. The aggregate can never have more or less market exposure than average, even though individuals like you or me can.
The market is not the origin of money and it is not a closed system. I can invest my $100 anywhere, if I put it into the stock market that money 'flows' in, in a sense of psychological valuation. Yes, someone else receives the money in exchange for a share but that doesn't mean they are putting it back into the market.
The key idea is how people think about buying or selling. If I buy a stock for $100 I obviously think it is worth that or more. If the value of the stock crashes, at that moment in time I am out the difference should I sell at the new value.
Also, the market shouldn't be anthropomorphized nor averaged. Ultimately it is a bunch of individuals buying and selling and their exposure has practical consequences, especially when it is concentrated along different dimensions, like retail vs. non-retail. A 'rich' individual buying $1 billion worth of a stock is not the same as 1,000,000 'poor' individuals buying $1000 of a stock.
Ofc, this is somewhat linked to valuations, but market could crash and it wouldn't decrease. Unless some people take money out of this circulation.
Given that, my initial comment was invalid.