Sometimes yes, sometimes no. Investment in real estate doesn't necessarily "transfer wealth to doers". Investment in crypto doesn't. Investment in buying existing stock doesn't (until and unless value is realized by e.g. issuing new stock—and it can be, and is, but isn't necessarily). Investment in government bonds that ultimately just pay interest on existing debt doesn't.
Investment in anything that may move certain indicators a good direction (some of the money pays workers; GDP perhaps even goes up as a result of the activity) but worsens the economic position of "doers" across the overall population doesn't just fail to transfer money downward and stimulate consumer demand, but does the opposite. Investment in ways to more efficiently and effectively deny people healthcare coverage they're supposed to have, for instance. Lots of activity in weakly-competitive markets falls under this heading, and since we all but entirely stopped enforcing anti-trust in the '70s, that describes an increasingly large proportion of the economy with each passing year.
Sure it does! Investment in all those things creates demand.
Real estate: demand for houses means demand for house building and maintenance.
Crypto: demand for chips and electricity (yes, this is super-dumb demand for dubious benefit, but demand nonetheless, just like paying people to dig holes and fill them in is also demand).
Stock: I almost agree with you, but 1) stockbroking is a whole industry funded by taking a percentage on stock purchases, 2) if you buy some stock for some cash, the counterparty now has cash, which they are either going to keep, spend, or invest in something else, so the transaction is neutral-to-positive in terms of demand generation.
Bonds: why do governments issue bonds? To get money to spend on stuff! Every penny of your bond purchase gets spent on government activities. Some of that is paying interest, but that interest is income for other bondholders (who then typically spend it)
With taxes and transaction fees skimming a little bit off the top of everything, it’s actually almost impossible to engage in any financial transaction without that transaction stimulating all kinds of additional activity. Not all of it is valuable or even ethical activity, but the point is that the scenario posited (“everyone is just investing and there’s no real demand underpinning it”) is very unlikely to happen.
Yeah, it's a dynamic system, I get it, but it does seem like the beneficial effect of adding another dollar to the investment-side versus the demand-side ought to differ as balance of the overall money-supply shifts between the two, and it seems to me that if the rate of accumulation to one side is excessive it could outpace the ability of the system to "naturally" redistribute that balance.
I'd expect "more investment dollars chasing smaller returns" (because the demand-side doesn't have enough cash) to show up as a declining velocity of money, and from what I can tell that has been trending downward from a peak in the late '90s (M2) or around '08 (M1). I'd also expect this to cause some apparently-goofy valuations in the stock market, and... ditto. Increasing reliance on investments that rely on the price of the investment simply going up for returns, not on returns from productive activity, and... yep (real estate sure appears to be caught in a nasty trap of this sort, in particular). Or an enthusiastic boom in "investment vehicles" that permit near-zero-actual-economic-value speedrunning of the entire history of financial scams, and... yep, again.
Investment in anything that may move certain indicators a good direction (some of the money pays workers; GDP perhaps even goes up as a result of the activity) but worsens the economic position of "doers" across the overall population doesn't just fail to transfer money downward and stimulate consumer demand, but does the opposite. Investment in ways to more efficiently and effectively deny people healthcare coverage they're supposed to have, for instance. Lots of activity in weakly-competitive markets falls under this heading, and since we all but entirely stopped enforcing anti-trust in the '70s, that describes an increasingly large proportion of the economy with each passing year.