Crash date market stock
Investors usually purchase stock shares in order to enjoy the fruits of high dividend yield or to achieve appreciation on their investments. The investors are generally not worried about the periodic variation in stock prices, but incur heavy losses at the time of market crash. A stock market crash is a sudden dramatic decline of stock prices across the entire cross section. The sections of cash market, derivatives called futures and options get affected instantly. The other financial market categories of mutual funds also display a bear trend. The net asset values of various schemes are also declined to that extent.
The reason for stock market crash is the panic situation caused by the fear of drastic change in the economy. If one of the biggest financial institutions reacts to certain economic events and start selling the stocks, the other institutions follow the trend without giving a second thought. The same panic situation spreads across the entire population of investors and selling continues. The other causes of market crash may be prolonged period of rising stock prices. The rise in prices doesnt add any revenue in the pockets of investors unless stocks are sold and finance is accumulated. Therefore the crash occurs. There exists an important financial term called as price to the earning ratio. This ratio is nothing but current market price divided by a figure of earning per share index. In normal course market behaves in the range of average price to earning ratio most of the times. If this ratio exceeds long term average and market participants have utilized the margin debt to a large extent, the situation may lead to market crash. Under crash market duration, most of the prices decline to any lower levels. The prices may remain at lower levels for a long duration.
Wall Street crash of 1929
The famous crash occurred on October 29 ; 1929. The economy was on a growing path in respect of innovations such as radio, automobiles, and aviation and telephone sectors. The companies who captured such sectors were highly rewarded due to the dis-proportional rise in their share prices. Financial institutes also earned from the rising trend. The rosy picture of money making, caused investors to use margin debt very often. The rise in share prices resulted into increase in the stock market heavily within a month. On the contrary people realized that economy was showing downward trend and the melt down in stock market started immediately. The sudden rush of selling was like a flood and investors were not even able to know about the share prices. The available communication facilities were clogged which created a lot of fear panic and dread.
2000-2002 stock market crash
This is known as the 10th worst market crash in the U.S. stock market history. Since it happened recently people remember the details precisely. The bubble in information technology sector and the disastrous attack by the terrorists on September 11th was responsible for the stock market crash. The market experts felt the intensity of this crash is less compared to earlier ones. The market remained in bear phase for almost three years. It resulted in the losses of nearly forty percent of investors wealth. The effect of terrorist attack was also responsible for stock market crash in the Asian market.
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