You open your brokerage app, and it’s a sea of crimson. Again. It feels like every time you check the headlines, some billionaire is sounding the alarm about a "once-in-a-century" crash, or your neighbor is complaining about their 401(k) evaporating into thin air. It leads to that nagging, late-night question: Is everyone losing money in the stock market, or is it just you?
Honestly? No. Not everyone. But it sure feels that way when the S&P 500 starts twitching.
The stock market isn't a monolithic block where everyone wins or loses at the exact same time. It’s a messy, chaotic ecosystem of high-frequency traders, pension funds, and people like you just trying to retire before they're 80. While the "average" investor might be down during a bear market, there are always pockets of the economy—and specific types of investors—who are actually making a killing while everyone else panics.
Why it Feels Like a Universal Losing Streak
Psychology is a jerk. Specifically, "loss aversion." Nobel Prize winner Daniel Kahneman famously pointed out that the pain of losing $100 is twice as potent as the joy of gaining $100. When the market dips 10%, it feels like a catastrophe. When it goes up 10%, we just think, "Yeah, that's what it's supposed to do."
Social media makes this ten times worse. You aren't going to see someone post a boring screenshot of their index fund growing by 0.2% on a Tuesday. You will see the guy who lost his entire life savings on 0DTE (zero days to expiration) options or the "finfluencer" screaming that the dollar is collapsing. This creates a feedback loop. We see the pain everywhere, so we assume the pain is universal.
But let’s look at the actual data from the NYSE and Nasdaq. Even in a "down" year, roughly 25% to 30% of individual stocks often end the year in the green. During the 2022 slump, for instance, while tech giants like Meta and Amazon were getting absolutely pummeled, energy stocks were having a literal party. If you owned ExxonMobil or Chevron back then, you weren't losing money; you were probably shopping for a boat.
The market is a rotation. Money doesn't usually disappear; it just moves.
The Difference Between "Paper Losses" and Real Losses
Here is the thing people forget: You haven't actually lost a dime until you hit that "sell" button.
Most people asking is everyone losing money in the stock market are looking at their "unrealized" P&L. That's just a number on a screen. It’s a valuation. If you bought a house for $500,000 and the neighbor’s house sells for $450,000, did you lose $50,000 today? Only if you tried to sell your house at 2:00 PM this afternoon.
🔗 Read more: Price of Tesla Stock Today: Why Everyone is Watching January 28
The people who are truly losing money are the ones forced to sell during a downturn. This usually happens for three reasons:
- Margin Calls: They borrowed money from their broker to buy more stock, and now the broker is demanding the cash back because the collateral dropped.
- Panic: They couldn't stomach the volatility and "sold at the bottom" to save what was left.
- Bad Timing: They needed the cash for a down payment or an emergency right when the market tanked.
Meanwhile, institutional investors—the big banks like Goldman Sachs or BlackRock—often use these periods of "everyone losing money" to accumulate shares at a discount. They have the balance sheets to wait five years for a recovery. Retail investors often don't.
The Great Divide: Indexers vs. Stock Pickers
If you’re a diversified index fund investor, you’re basically betting on the long-term ingenuity of the human race. Historically, that’s a winning bet. Since its inception, the S&P 500 has returned an average of about 10% annually.
But "average" is a sneaky word.
In any given year, the market might be up 30% or down 20%. If you started investing in 2021 at the height of the post-pandemic euphoria, you might still be underwater on certain speculative positions. If you’ve been in since 2010, the recent "losses" are just a small haircut on a massive pile of gains. Experience changes your perspective on whether "everyone" is losing.
Who is Actually Winning Right Now?
While the headlines focus on the misery, several groups are consistently profitable even when the Dow is screaming.
Short Sellers and Hedgers
There are people who literally bet on things to fail. Short sellers borrow shares, sell them high, and hope to buy them back low. When the market crashes, these folks are the ones popping champagne. Then you have the "hedgers"—professional traders who use put options to protect their downside. They might lose money on their stocks, but their options gain so much value that they break even or stay ahead.
The "Theta Gang"
This is a nickname for traders who sell options rather than buying them. They act like the casino. They collect premiums from people who are gambling on big swings. As long as the market doesn't move too violently in one direction, they keep the "house edge."
💡 You might also like: GA 30084 from Georgia Ports Authority: The Truth Behind the Zip Code
High-Yield Dividend Investors
If you own "boring" companies—think consumer staples like Procter & Gamble or utilities like Duke Energy—you might see your stock price wiggle around, but those dividend checks keep hitting your account every quarter. For an income investor, a falling stock price is sometimes a blessing because it means their dividend yield just went up for new shares they buy.
Real Examples of the "Losing" Illusion
Take a look at the "Dot Com" crash of 2000. If you owned Pets.com, you lost everything. 100% gone. But if you owned boring old value stocks or held onto a little-known bookstore called Amazon, you eventually came out fine—though it took years of stomach-churning volatility.
Or look at the 2008 financial crisis. For about 18 months, it really did seem like everyone was losing money in the stock market. Banks were folding. Portfolios were halved. But by 2013, the market had made all those losses back and then some. The only people who "lost" were the ones who exited the game entirely at the lows.
This leads to an uncomfortable truth. The market is designed to transfer money from the impatient to the patient. It’s a cliché because it’s true.
The Role of Inflation and "Real" Returns
Sometimes, even when the numbers on your screen are going up, you're still losing. This is the "hidden" loss. If the stock market goes up 5% in a year, but inflation is at 7%, your purchasing power actually shrank. You have more dollars, but those dollars buy fewer tacos.
In 2023 and 2024, many investors saw their portfolios recover, but because the cost of living spiked so high, they didn't feel any richer. This creates a psychological sense of loss even when the brokerage statement says you’re winning.
Common Traps That Guarantee You Lose Money
If you feel like you’re the only one losing, check if you’re falling into these very human traps:
- Chasing the Pump: Buying a stock because it’s already up 50% this month. By the time you hear about it on TikTok, the "smart money" is already looking for the exit.
- Over-concentration: Putting 40% of your net worth into a single "sure thing" AI stock. Diversification is boring, but it’s the only reason people survive bear markets.
- The Sunk Cost Fallacy: Holding onto a loser because "it has to go back up eventually." No, it doesn't. Some companies go to zero.
- Ignoring Fees: If you’re trading in and out of positions constantly, your broker (or the spread) is eating your lunch.
How to Stop Being the One Who Loses
The secret to not losing in the long run isn't finding the next Nvidia. It’s staying in the game long enough for math to take over.
📖 Related: Jerry Jones 19.2 Billion Net Worth: Why Everyone is Getting the Math Wrong
Stop Checking the Daily Ticker
If you aren't planning to sell for 10 years, why are you checking the price at 10:30 AM on a Wednesday? All that does is trigger your "fight or flight" response, which leads to bad decisions.
Automate the Process
Dollar-cost averaging (DCA) is the great equalizer. When the market is down and "everyone is losing," your automated investment is actually buying more shares for the same amount of money. You are effectively "greedy when others are fearful" without having to use any actual willpower.
Build a Cash Buffer
The biggest reason people lose money is that they are forced to sell. If you have six months of expenses in a high-yield savings account, you don't care if the market drops 20% next month. You can wait it out. Cash is your "sanity insurance."
Rebalance Your Risk
If your portfolio is making you lose sleep, you have too much risk. Period. It doesn't matter what the "experts" say about being 100% in equities. If you are going to panic-sell during a correction, you should probably have some bonds or even just high-yield cash in the mix to dampen the volatility.
The Reality Check
So, is everyone losing money in the stock market?
Right now, in this specific moment, a lot of people are seeing red. Speculative traders are getting crushed. People who bought the hype at the top are hurting. But the "market" itself is just a reflection of the global economy's ability to produce profit. As long as companies keep selling products and innovating, the market has an upward bias.
The winners are usually the people you never hear about. They aren't posting on Reddit. They aren't on CNBC. They are just quietly buying boring index funds, reinvesting their dividends, and going for a walk while the rest of the world frets over a 2% dip in the Nasdaq.
Actionable Steps to Protect Your Portfolio
- Audit your "Why": Why do you own each stock? If the answer is "because a guy on the internet liked it," sell it and move that money to a broad index fund like VTI or VOO.
- Turn off "All-Time" View: Most apps default to showing you your total gain/loss. If you’ve had a bad year, looking at that big red number just makes you prone to "revenge trading" to win it back. Switch your view to "Today’s Change" or, better yet, just close the app.
- Check your Expense Ratios: You might be losing money to your own bank. If you’re in mutual funds with a 1% fee, you’re losing a massive chunk of your lifetime wealth to a manager who is likely underperforming the market anyway.
- Tax-Loss Harvesting: If you actually are down, use it. You can use up to $3,000 of capital losses to offset your regular income tax in the U.S. It’s a way to make the government "share" some of your pain.
- Re-evaluate your Time Horizon: If you need the money in less than three years, it shouldn't be in the stock market. Period. Put it in a Treasury bill or a CD. The stock market is for "future you," not "rent-paying you."