Potentially, 1 Trillion Dollars Flow into the stock markets per year

Discussion in 'Economics' started by HeSaidSheSaid, Dec 24, 2020.

  1. According to CNBC, about 40% of Americans participate in 401K retirement plan, then that would account for about $1.28 trillion dollars contributed by people who have 401K account (40% of 320 millions of US population * $10K/per person/year (let's assume these 40% percenters contribute only $10K/per year).

    On the IRA/Roth side, according to this website, 36% of Anericans have IRA/Roth account, then that would account for another $460 billion dollars contributed from the IRA/Roth accounts (let's assume people didn't max out on the contribution amount, just contributed about $4K/person/per year. (36%*322M*$4K=$460B).
    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3661883

    totally, there'd be about $1.28T+$460B = $1.7 trillion availabe for investing in the stock markets, but let's stay conservative, and assume only 60% of this total sum invested in the stock markets, then that would come out about $1 trillion dollars potentially flow into the stock markets per year.

    $1 trillion could afford one to buy TSLA 1.5 time over!

    this didn't take into account of $1 trillion dollars contributed by elitetraders annually.

    Goldman, JPM, Citadel, the FED could contribute few more trillions or they could take money away.

    As of Sept 2020, the total market capitalization of the U.S. stock market is $36,258,650.9 million. ~$36 trillions.
     
    Nobert likes this.
  2. terr

    terr

    People withdraw money from their retirement accounts as well.
     
  3. Trader200K

    Trader200K

    At a daily run rate of $600MM/day, ARKK alone is supposed to add $100B+.

    1$T might be light ...

    With MMT, why not $8 trillion ... or whatever?
     
  4. padutrader

    padutrader

    that is per year? f.png f.png
     

  5. https://ark-funds.com/wp-content/fundsiteliterature/holdings/ARK_INNOVATION_ETF_ARKK_HOLDINGS.pdf

    the link above shows the fund holds 48 stocks in its fund. Total fund value is around $18.6 billion. and its daily average trading volume is about 3.9 million, and it's current traded at $129.85/share, so it means the total daily trading amount is about $506 millions ($129.85*3.9M). this includes for both buying/selling. Let's assume in a particular green day for the fund, 60% of the trading volume is from the buy side, and 40% of the trading volume if from the sell side. This estimate is from the 30K feet level + each stock has its own weight factor in the fund (notice TSLA has a weight of 10%). So the dollar amount from the buy side is $304M ($506*.60), and $202M gained from the sell side. it means approximately, about $100 M ($304-$202) of new money flown into the fund in a day. probably, only the market maker would know the true numbers of how much buying and selling per day... I' saying ARKK alone wouldn't add $100B+ to the stock markets.

    Padutrader - the amount was for the equity markets only. I heard FX and bond market are also a lot bigger than the stock markets.