[lehighguy]

Stocks go up in value because thier underlying assets (companies) go up in value. This is because of the expansion of the economy over time. Let us say for arguement sake that stocks have a long run return of 11% (i'm making this up). This 11% is based on the increase in the value of the underlying companies.

So if everyone buys and holds they will return 11% over the long run. This is the part of the game that is NOT ZERO SUM.

However, if you try to beat the market (return greater the 11%) by purchasing the better stocks at the right time then you must get your profits from somwhere. That somewhere being the poor sap on the other end of that trade. There is a long debate over wether anyone can beat the market over the long run but you can find that in other threads.

Here's a comparable. Imagine a poker game where the house put and extra $3 into the pot at the end of every hand rather then taking it away as part of the rake. As such, new money would be flowing into the table constantly (the 11%). However, the better players will still do much better then the fish since they will not only benefit from the extra money but also their own play.