You open your brokerage app. Everything is red. You glance at the headlines, and they’re screaming about a "market correction" or a "bloodbath on Wall Street." It feels personal. It feels like every single person with a 401(k) or a Robinhood account is collectively watching their net worth vanish into the digital ether. But honestly, is everyone losing money in the stock market, or is that just what it feels like when the S&P 500 takes a 3% haircut in a single afternoon?
The short answer? No.
The long answer is a bit more complicated, involving math, psychology, and the annoying reality that some people actually thrive when things go south. While the average retail investor might be seeing their "unrealized gains" evaporate, institutional shorts, dividend aristocrats, and those sitting on mountains of cash are playing an entirely different game.
The Great Illusion of "Everyone"
Social media is a giant echo chamber of pain during market downturns. When the Nasdaq dips, the loudest voices are usually the ones who bought at the peak. If you bought Nvidia at $130 and it drops to $110, you feel like you're losing. But the guy who bought it three years ago? He’s still up hundreds of percent. He isn't losing; he’s just slightly less rich than he was yesterday.
Perspective is everything.
Markets are basically a giant machine for transferring money from the impatient to the patient. That’s a cliché because it’s true. During the 2022 bear market, where the S&P 500 fell nearly 20%, it seemed like a total wipeout. Yet, energy stocks—think ExxonMobil or Chevron—were absolutely tearing it up. If your portfolio was heavy on tech, you were bleeding. If you were heavy on oil and gas, you were buying a boat.
Wealth doesn't just disappear; it shifts.
Why it feels like a universal loss
Humans have this glitch called loss aversion. Psychologically, the pain of losing $1,000 is twice as intense as the joy of gaining $1,000. So, when the market stays flat or dips slightly, it feels like a catastrophe. We forget the years of 20% returns the moment we see a month of -5%.
Is Everyone Losing Money in the Stock Market Right Now?
To understand if "everyone" is losing, we have to look at who is selling. For every seller, there is a buyer. If you sell your Tesla shares at a loss because you're panicked, the person buying them isn't losing money—they are acquiring an asset at a discount.
The people who are truly losing money are those who "capitulate."
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That’s the fancy finance term for "freaking out and hitting the sell button at the bottom." Once you sell, that loss is permanent. It’s no longer on paper. It’s a hole in your bank account. According to data from Dalbar’s Quantitative Analysis of Investor Behavior, the average retail investor consistently underperforms the market because they jump in when things are expensive and jump out when things are cheap.
They are the ones losing money.
Meanwhile, "The Big Money"—pension funds, university endowments, and guys like Warren Buffett—usually keep buying. Buffett’s Berkshire Hathaway famously sits on huge piles of cash (over $180 billion at times) specifically so they can go shopping when everyone else is crying. They aren't losing; they’re waiting for a sale.
The Role of Short Sellers
Let’s talk about the "villains" of the story: short sellers. These are traders who bet that a stock will go down. When the market crashes, these people make a killing. During the 2008 financial crisis, while millions lost their homes and retirement savings, traders like Michael Burry (featured in The Big Short) made hundreds of millions.
Is everyone losing? Definitely not. The house, and those betting against the house, often do just fine.
The Difference Between Paper Losses and Real Losses
We need to get real about what "losing" means. If your portfolio value goes from $50,000 to $45,000, you haven't actually lost $5,000 yet. You still own the same number of shares in those companies. You own the same percentage of Apple or Microsoft.
The value is just what someone else is willing to pay for it today.
If you don't need the money today, that price is mostly irrelevant noise. The stock market has historically returned about 10% annually over long periods. But it never does it in a straight line. It looks more like a jagged mountain range. If you zoom in on one cliff, it looks like a dead end. Zoom out, and the trend is clearly upward.
Real-world example: The 2020 Covid Crash
Remember March 2020? The market fell 30% in a few weeks. It felt like the end of the world. People pulled their money out of their 401(k)s. They thought, "Everyone is losing money, I need to save what I have left."
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Those people lost.
The people who stayed in—or better yet, bought more—saw a full recovery and new all-time highs within months. By the end of 2020, the market was actually up. The only people who "lost" were the ones who exited the ride while it was at its lowest point.
Who is Actually Getting Hurt?
While "everyone" isn't losing, specific groups of people definitely are.
- Options Traders: If you're playing with 0DTE (zero days to expiration) options, you aren't investing. You're gambling. When the market moves against you, your money doesn't just dip—it goes to zero. This is where the most tragic "loss" stories come from.
- The Over-Leveraged: If you borrowed money to buy stocks (margin), a dip can trigger a margin call. Your broker will literally sell your stocks for you to cover the debt, often at the worst possible price.
- Retirees: This is the sad part. If you are 65 and need to withdraw 4% of your portfolio this year to pay for groceries, and the market is down 20%, you are forced to realize those losses. You don't have the luxury of waiting ten years for a recovery.
For the rest of us—the 20, 30, and 40-somethings—a down market is actually a gift. It’s a chance to buy future wealth at a lower price point.
The Psychology of the "Red Screen"
Why do we think everyone is losing? Because the media tells us so. High-energy, fear-based news gets more clicks than "Market fluctuates within normal historical parameters, everything is fine."
When CNBC puts up the "Markets in Turmoil" banner, it triggers a physical stress response. Your brain treats a falling stock portfolio like a physical predator. You want to run. You want to hide. You assume that if you're feeling this way, everyone else must be suffering too.
But check the volume. Millions of shares are being traded. For every person selling in a panic, someone is calmly clicking "buy."
The Dividend Safety Net
Another group not losing? Dividend investors. If you own shares of a company like Coca-Cola or Realty Income, they pay you just for owning the stock. Even if the stock price drops 10%, that quarterly check still hits your account. For many "income investors," the price of the stock is secondary to the yield it produces. They’re sitting back, sipping coffee, and watching the dividends reinvest.
Is the Stock Market Rigged?
This is a common sentiment when people feel like they're losing. "The big banks are winning while I’m losing!"
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Sorta.
High-frequency traders and hedge funds have tools that retail investors don't. They have algorithms that can trade in microseconds. But they are also playing a different game. They are looking for tiny inefficiencies. You, as a long-term investor, have one massive advantage they don't: Time. A hedge fund manager has to report quarterly earnings to their investors. If they have a bad three months, they get fired. You? You can have a bad three years and it doesn't matter, as long as your thesis for the companies you own remains solid.
Actionable Steps to Stop Feeling Like You're Losing
If you feel like you're losing money in the stock market, you probably need to change your strategy. Or at least your mindset.
Stop checking the app daily.
Seriously. There is a direct correlation between how often you check your portfolio and how likely you are to make a stupid, fear-based decision. If you’re a long-term investor, checking the daily price of a stock is like checking the temperature of your oven every thirty seconds while trying to bake a cake. You’re just letting the heat out.
Re-evaluate your risk tolerance.
If a 10% drop makes you lose sleep, you have too much money in stocks. Move some to bonds or high-yield savings accounts. It’s better to have a 7% return you can stomach than a 10% return that gives you an ulcer and makes you sell at the bottom.
Look at your "Cost Basis."
Instead of looking at the "Total Gain/Loss," look at your average purchase price. If the current price is above your average, you haven't lost anything. You’ve just lost some "extra" profit.
Automate your investing.
Dollar-cost averaging (DCA) is the ultimate "everyone isn't losing" hack. If you invest $500 every month regardless of the price, you end up buying more shares when they are cheap and fewer when they are expensive. It removes the emotion. It makes the "losses" feel like "discounts."
The Bottom Line
Is everyone losing money in the stock market? No. The market is a massive, complex ecosystem where money is constantly being reshuffled. The losers are generally the panicked, the over-leveraged, and the short-sighted. The winners are the ones who treat the stock market like a grocery store—they love it when things go on sale.
The next time you see the "red screen," remember that prices are not reality. They are just the current sentiment of a very fickle crowd. Stay the course, keep your eyes on the five-to-ten-year horizon, and stop treating your retirement account like a video game high score.
Next Steps for Your Portfolio:
- Audit your holdings: Check if you own "hype" stocks that have no earnings. Those are the ones that actually go to zero. If you own profitable, boring companies, you'll likely be fine.
- Verify your emergency fund: You only "lose" when you're forced to sell. Ensure you have 3-6 months of cash in a high-yield savings account so you never have to liquidate your stocks during a downturn just to pay rent.
- Zoom out: Open a chart of the S&P 500 for the last 30 years. Find the "crashes" of 2000, 2008, and 2020. See how small they look now? That’s the perspective you need.