What was the largest market crash in history?

December 5, 2022

The largest market crash in history is generally considered to be the stock market crash of 1929, also known as the Great Crash or the Wall Street Crash. This crash occurred on October 29, 1929, and is often seen as the beginning of the Great Depression.

On the day of the crash, the Dow Jones Industrial Average (DJIA) fell by nearly 25%, losing a total of 38.33 points. This was the largest one-day percentage drop in the DJIA’s history, and it sent shockwaves through the financial markets.

The crash of 1929 was caused by a number of factors, including excessive speculation, overproduction, and a lack of regulation. As investors became increasingly bullish, stock prices soared to unsustainable levels, and the market became increasingly vulnerable to a correction. When the correction finally came, it was swift and severe, leading to widespread panic and a sharp contraction in economic activity.

The impact of the crash of 1929 was far-reaching and long-lasting. It led to a prolonged period of economic stagnation and high unemployment, and it set the stage for the Great Depression. Despite its devastating effects, the crash of 1929 remains an important cautionary tale for investors and policy makers.

“To be a good trader, you need to trade with your eyes open, recognise real trends and turns, and not waste time or energy on regrets and wishful thinking.” – Mark Douglas

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