Lost All My Money In Stock Market – The stock price chart shows the stock market crash in 2020, showing a sharp drop in prices followed by a recovery.
A stock market crash is a sudden drop in prices in a large part of the stock market, resulting in a significant loss of stock market capitalization. Theft is caused by the sale of panic and goods related to the economy. They tend to follow speculation and economic bubbles.
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The collapse of the stock market is a social event in which external economic events meet the opinions of many people in a positive response where the sale of some market participants leads to the sale of other market participants. In general, crashes occur under the following conditions: periods of bull market and extreme economic optimism, markets where the price-to-earnings ratio exceeds the long-term average, and high use of prisons. Credit and expansion by market participants. Other factors such as war, corporate fraud, changes in federal laws and regulations, and natural disasters in the economy can cause significant declines in the market value of various stocks. Stock prices for competing companies and affected companies can rise despite bankruptcy.
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There is no numerical definition of a stock market crash, but the term is commonly used for a decline of more than 10 percent in the stock market index over several days. A crash is often different from a bear market (a period of falling prices measured in months or years) because a crash involves panic selling and a sudden drop in price. Crashes are often associated with bear markets; However, it does not happen at the same time. Black Monday (1987), for example, did not lead to a bear market. Similarly, the explosion of Japanese real estate prices has occurred for many years without a significant decline. Stock market crashes are not surprising.
Most accidents are unintended. As Niall Ferguson said, “Before the fall, our world seemed to stand still, deceptively, in equilibrium for a while. So when the fall comes – which it does – everyone seems to be surprised. And our brain also tells us that it is not the time to fall.”
The Tulip Mania (1634-1637), in which some tulips are said to have sold for more than ten times the annual income of skilled workers, is generally regarded as the first recorded economic boom.
In 1907 and 1908, stock prices fell by as much as 50% for a variety of reasons, driven by the use of copper bullion by the Knickerbocker Trust Company.
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Several investment funds and banks that invested in the stock market collapsed and began to close. Some of the bank’s actions were prevented by J.P.’s intervention. Morgana.
Economic growth for most of the Thundering Twenties. It was a golden age of technology, with inventions such as radio, automobiles, airplanes, and television voice, and the grid used. Companies that pioneered this development, including Radio Corporation of America (RCA) and General Motors, saw their stocks soar. Financial institutions also did well, as Wall Street banks established investment companies (known as trusts) such as Goldman Sachs Trading Corporation. Investors are happy with the returns available in the stock market, especially taking advantage of leveraged debt (like borrowing money from your stockbroker to finance part of your purchase, using the stock you bought as collateral).
On August 24, 1921, the Dow Jones Industrial Average (DJIA) was at 63.9. By September 3, 1929, it had increased more than six times to 381.2. It did not recover this level for another 25 years. By the summer of 1929, it was clear that the economy was slowing down and the stock market was in the midst of a recession. This decline caused anxiety among investors, and evts peaked on October 24, 28, and 29 (known as Black Thursday, Black Monday, and Black Tuesday).
On Black Monday, the DJIA fell 38.33 points to 260, down 12.8%. The trading volume has flooded the ticker bar system which usually informs investors about the current price of their shares. Telephone and telegraph lines are closed and no dispatches can be made. This information vacuum only creates more fear and panic. New technology, once celebrated by advertisers, is now adding to their woes.
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The next day, Black Tuesday, was a day of torture. Forced to liquidate their shares because of the phone calls, many traders flooded the stock market with sell orders. The Dow fell 30.57 points to close at 230.07 for the day. Popular stocks of the time saw their value decline. For two days, the DJIA fell 23%.
By the week of November 11, 1929, the index stood at 228, an additional 40% drop from the September high. The market rose in the following months, but it was a short-lived recovery that caused unsuspecting traders to continue to lose. The DJIA lost 89% of its pre-market value in July 1932. The crash was followed by the Great Depression, the worst economic crisis of modern times, which plagued the stock market and Wall Street in the 1930s.
The mid-1980s were a time of strong economic optimism. From August 1982 to its peak in August 1987, the Dow Jones Industrial Average (DJIA) rose from 776 to 2722. The increase in the stock market index of 19 major markets reached 296% during this period. The average number of shares traded on the New York Stock Exchange rose from 65 million to 181 million.
The fall of October 19, 1987, Black Monday, was the end of a market decline that began five days earlier on October 14. The DJIA fell 3.81% on October 14, followed by a 4.60% low on Friday, October 16. On Black Monday, the DJIA fell 508 points, a loss by 22.6% of its value in one day. The S&P 500 fell 20.4%, falling from 282.7 to 225.06. The NASDAQ Composite lost only 11.3%, not because of the restraint of traders, but because the NASDAQ market system failed. Burdened by trading orders, many stocks on NISE are facing suspensions and delays in trading. Among the 2,257 stocks on NISE, there were delays and halts in trading in 195 stocks during the afternoon.
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The NASDAQ market is the worst. Because it relies on a “marketing” system that allows market makers to get out of trading, the liquidity of NASDAQ stocks has dried up. Many stock traders are faced with a pathological situation where the selling price of the stock has exceeded the asking price. These conditions are “locked in” trades are very rare. On October 19, Microsoft shares traded on NASDAQ for 54 minutes.
The crash is Wall Street’s biggest single-day loss in continuous trading to date. From the beginning of trading on October 14th to the end of October 19th, the DJIA lost 760 points, representing a decline of more than 31%.
In October 1987, the world’s capital markets experienced a crash or a major decline. The FTSE 100 lost 10.8% on Monday and another 12.2% the following day. Austria is the most affected (down 11.4%), while Hong Kong is the most affected down 45.8%. Among the 23 developed countries, 19 countries have decreased by more than 20%.
Despite the fear of a major depression, the market rose immediately after the crash, which rose to a one-day record high of 102.27 the next day and 186.64 points on Thursday, October 22. It took only two years for Dov to fully recover; By September 1989, the market had regained all the value it had lost in the 1987 crash. The DJIA rose 0.6% during 1987.
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There is no final conclusion about what caused the crash in 1987. Stocks have been growing for years, and the price-to-earnings ratio in the US market is higher than the post-war average. The S&P 500 trades at 23 times earnings, after a war high and above its 14-time average.
Herd behavior and sentiment play an important role in stock market failures, but analysts also try to find outliers. In addition to concerns about the overvaluation of the money market, the fall has been blamed on things like trading plans, hedging stocks and derivatives, as well as recent news of bad economic indicators (such as the large US deficit and the falling dollar, which seems to mean that future interest rates will increase).
One of the consequences of the crash of 1987 was the introduction of changes or the suspension of trading on NISE. Based on the idea that the cooling off period would facilitate extraordinary sales, this market closure would be triggered whenever there was a significant pre-determined market decline on the day of the sale.
The closing price of OMX Island 15 during the five trading weeks between September 29, 2008 and October 31, 2008.
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During the global financial crisis in 2008, the BSE Ssek saw a sharp decline. It fell more than 21,000 points in January 2008
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