When Stock Prices Drop, Where Is the Money?
As stock prices plummet, investors often wonder where their money has gone. In truth, it hasn’t vanished—instead, the perceived value of their investment has changed. Stock price shifts are more about changing perceptions of value rather than money physically moving from one place to another.
Say you buy 100 shares of Apple Inc. (AAPL) at $150 each. Later, supply chain issues arise, or a new Apple product underperforms. As a result, investors lose confidence in Apple’s future performance, and the stock price drops to $100 per share.
While it might seem like you’ve “lost” $50 per share, that money didn’t go anywhere. The price change simply reflects what investors are now willing to pay for Apple shares. It’s like how a new…
