<p>From an aggregate level, the only direct income effect is that you will have paid a brokerage fee, which is part of the financial sector’s revenue.</p>

<p>After that, all that has happened is a rearrangement of an existing financial asset. If the seller uses the proceeds to purchase goods and services for consumption, that could be attributed to the purchase, although that might be a stretch.</p>

<p>The seller may also pay capital gains tax, and since they need a buyer to sell, that could be pinned on the purchase.</p>

<p>The effect on the price is hard to judge. In the short term, there might be some effect (although it would be negligible for a large cap firm), it will not really matter in the long run, if we assume that prices drift towards the fair value determined by corporate profitability.</p>

CC BY-SA 4.0
2020-04-30T00:13:04.470Z
2020-04-30T00:13:04.470Z
Brian Romanchuk
<p>I know that participating in an IPO is directly helping the company, because my money is going straight into their bank account. I know that the stock market as a whole has an effect on the economy. However, what would be the measurable effect of me buying $1,000,000 of, say, Amazon? They've already IPO'd, so it's just a million of my dollars getting spread out between other random people who were selling regardless of whether or not I, personally, am buying. I guess all it does is create a slight upward pressure on the stock? Can the effect of that upward pressure be quantified in some way that means something to a layman, e.g. "it creates 1 new job in the US" or "it's equivalent to spending a million on arbitrary consumer products"?</p>

CC BY-SA 4.0
2020-04-30T07:23:23.503Z
Welcome! This question is likely to be answered with opinions rather than facts and citations. It should be updated so it will lead to fact-based answers.
emeryville
<macroeconomics><microeconomics><stock-market>
By buying stocks, am I as an individual measurably affecting the economy?
The Guy with The Hat
# By buying stocks, am I as an individual measurably affecting the economy?

(Asked by: username_0 on 2020-04-29)

I know that participating in an IPO is directly helping the company, because my money is going straight into their bank account. I know that the stock market as a whole has an effect on the economy. However, what would be the measurable effect of me buying $1,000,000 of, say, Amazon? They've already IPO'd, so it's just a million of my dollars getting spread out between other random people who were selling regardless of whether or not I, personally, am buying. I guess all it does is create a slight upward pressure on the stock? Can the effect of that upward pressure be quantified in some way that means something to a layman, e.g. "it creates 1 new job in the US" or "it's equivalent to spending a million on arbitrary consumer products"?

**Tags:** macroeconomics, microeconomics, stock-market
> **Comments:**
> **username_1**: Welcome! This question is likely to be answered with opinions rather than facts and citations. It should be updated so it will lead to fact-based answers.  

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## 1 answers

### Answer by username_2 on 2020-04-30. Score: 2 | Accepted answer

From an aggregate level, the only direct income effect is that you will have paid a brokerage fee, which is part of the financial sector’s revenue.

After that, all that has happened is a rearrangement of an existing financial asset. If the seller uses the proceeds to purchase goods and services for consumption, that could be attributed to the purchase, although that might be a stretch.

The seller may also pay capital gains tax, and since they need a buyer to sell, that could be pinned on the purchase.

The effect on the price is hard to judge. In the short term, there might be some effect (although it would be negligible for a large cap firm), it will not really matter in the long run, if we assume that prices drift towards the fair value determined by corporate profitability.


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