1929 stock market crash remains the most talked about event in the investor community.
Why is October a bad month for the stock market? Historical data indicates that there have been a few days of significant market crashes, all of which happened in October.
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The New York Stock Exchange lost 11 % of its value on October 24, 1929, often referred to as Black Thursday, when key American investors sat up and took notice for the first time.
On Black Monday, October 28, 1929, the Dow declined nearly 13 percent. On the following day, October 29, referred to as the Black Tuesday, the market dropped nearly 12 percent.
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Stockholders lost over $14 billion in value in a single day on October 29, when over sixteen million shares were traded. To put this in perspective, in those days three million shares trading in a single day was regarded as a busy day on the stock market.
On Wall Street, October 19, 1987, known as ‘Black Monday,’ severe and unexpected selloffs led to a major stock market meltdown. The Dow Jones Industrial Average dropped 508 points, or 22.6% of its value, in the greatest single-day decrease in its history when over $500 billion was lost in a single trading session.
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1929 stock market crash remains one of the most talked about events in the investor community. Here’s what happened before the infamous Dow Jones stock market crash of 1929.
The world economy reached its pinnacle in the 1920s, with the United States leading the way. This caused share and stock prices to soar above reasonable bounds to never-before-seen levels. The strength of the underlying economy had declined, but the stock exchange was not reflecting this.
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Between August 1921 and September 1929, the Dow Jones Industrial Average increased six times, from 63 to 381. Thereafter, the big meltdown happened.
The Dow had nearly lost half of its value by mid-November. The decline persisted into the summer of 1932, when the Dow closed at 41.22 points, 89 percent below its peak and the lowest closing value of the twentieth century. November 1954 saw the Dow reach its pre-crash levels once more.
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Many banks had invested in the stock market themselves. The US banking system’s collapse was a major factor in the Great Depression. As more and more people began taking out cash, banks’ cash reserves began to run low, which led to many of them failing.
