Why “Great Depression”

The stock market crash of 1929 is the most famous stock market crash of all time. Only 16% of American households were invested in the stock market within the United States during the period leading up to the depression, suggesting that the crash carried somewhat less of a weight in causing the depression. However, on Thursday and Friday of last week those five stocks were among the weakest stocks in the market. This mass hysteria and negative sentiment on the stock market fuels a craze of selling which keeps on driving stock prices down, thus causing the stock index to suffer. There was wide spread panic over the next several weeks, but the market appeared to be rebounding.

The ostensible reason for this fall was that the Saudis had refused to agree to production decreases being pushed by some OPEC members, instead choosing to let the market play out for the time being. For the next ten years, the United States was mired in a deep economic depression.Stock Market Crash

While some would argue that this fixed gold price ensured the rise for gold stock prices, this fallacy is simple to debunk by examining the positive effects on gold stocks after the removal of the gold standard in 1971. Still, the Dow average closed down only six points after a number of major banks and investment companies bought up great blocks of stock in a successful effort to stem the panic that day. Students will explain how the role of the Great Depression affected the American people and changed the role of the government. Update 8: The Dow climbs a little higher into a long sideways trading range, ultimately popping higher still before relentless declines begin around year end, tumbling into a protracted Bear market until a 2018ish bottom.Stock Market Crash

Stocks start to lose value, and when people become aware of this fact, they then want to sell, and before you know it everyone is selling rather than buying, and this brings about the stock market crash. The Black Thursday crash of the Exchange on October 24, 1929, and the sell-off panic which started on Black Tuesday, October 29, are often blamed for precipitating the Great Depression of 1929. Stock prices dropped at unprecedented rates, with volumes reaching levels so high that the ticker tape could not keep pace. Because fear is much easier to predict than greed therefore the market moves quicker. The Dow Jones Industrial Average nearly doubled, rising from 191 in early 1928 to 381 by September 3, 1929.

The market is quite stable at this stage, and there are good profits to be had from investment in this early part of the cycle. In that October 2008 fast, with no planning of my own, I was simply shuffling some playing cards and praying. When investing in shares or getting stock market advice people often forget to think about all of the other investors who are doing the exact same thing. Therefore, we should expect the bull market in stocks to continue, at least until the yield curve flattens out or becomes inverted. This was the time of the great depression, in a decade that preceded World War 2. The Dow was only able to return to its pre 1929 levels after 25 years. But in the later 1920s, stock investment began to decline due to lack of confidence.Stock Market Crash