History of Share Market Crashes
February 25, 2023 | Investing | No Comments|
Outside of the two main financial crises, there have been others. Share prices fell by billions of dollars during the Asian Financial Crisis of the 1990s and the Global Financial Crisis of 2008.
The Baby Boomers, who will be most affected by the next major market financial meltdown, may be to blame.
because they will withdraw their savings from the stock market, resulting in a significant selloff, as an increasing number of them retire.
With the markets at record highs, this has been predicted in the past, but there has been no evidence of it happening yet. However, who is brave enough to predict the stock exchange’s future direction?
One thing you can be sure of is that the market will crash again in the future; It only requires investors to be prepared for it.
The most notable declines in share prices over the past century are listed below.
1929: The Crash on Wall Street The crash on Wall Street lasted for more than four years. Investors borrowed money to purchase shares, and when those shares were sold to pay back their creditors, investors lost their money. The Great Depression of 1930s followed the 1929 crash.
1962: The Kennedy Slide The stock market had been rising steadily since the crash of 1929, and the ten years before 1962 were good for the market. When share prices plummeted in January, all of this changed. The decline was credited by President Kennedy as a correction for the rises of the previous ten years.
Crash of the stock market from 1973 to 1974 The Dow Jones fell by 45 percent during the two-year crash of the stock market from January 1973 to December 1974. Even worse, the UK stock market experienced a 73% decline in value during this time. The Bretton Woods System’s demise was to blame. A system based on an agreed-upon fixed currency rate was developed many decades earlier. In 1944, 44 nations met in Bretton Woods to discuss the currency issue, which is why the system is called Bretton Woods.
1987-Black Monday The 19th of October 1987 will always be remembered as “Black Monday” because that day saw the largest one-day drop in the history of the stock market. Before the crash, many investors borrowed money to buy shares, and as share prices rose, they borrowed more money using the value of their shares as security. However, when the stock market fell by 20% in a single day, many investors found themselves in financial trouble because they owed more money than their shares were worth.
The 1997 Asian Financial Crisis A lot of stock markets in Asia fell a lot between July and October because the market was too hot. The crash had a significant impact on many people who bought shares on credit or with money borrowed.
The collapse of several US financial institutions during the global financial crisis of 2007-2008.
2020: The Covid Market Crash On March 23, 2020, as Covid-19 began to take hold, stock markets plunged 34% in a single day. The Covid-19 pandemic caused a worldwide recession as a result of this.
Who knows when the next crash in the stock market will take place? Investors won’t be able to control it, that much is certain. Each of us is responsible for making financial plans that will minimize the impact of a market collapse. Diversification is one way to achieve this; that is, by putting your money in a variety of businesses. You won’t be putting too many ducks in a row this way.