| The two major crashes of the US stock market | | | | The crash was worldwide, starting in Hong Kong, |
| occurred in 1929 and 1987. These two years signified | | | | spreading to Europe, and finally hitting the United |
| the worst scenarios in the history of the stock | | | | States. Though the market dropped nearly 23 |
| market. | | | | percent in America, Hong Kong saw a drop of 46 |
| The 1929 stock market crash is probably the most | | | | percent. But it was New Zealand that got hit the |
| famous crash in history and occurred on October | | | | hardest with a catastrophic fall of about 60 percent. |
| 29th. The economy grew so quickly for twenty | | | | Because of the time zone difference, the 1987 crash |
| years straight and was considered to be in a golden | | | | is known as Black Tuesday in New Zealand, where |
| age of technology with inventions like the radio, cars, | | | | recovery took several years. |
| aviation, telephones, and more. | | | | American recovery was quicker, with the Dow Jones |
| Companies like General Motors, Radio Corporation of | | | | Industrial Average actually closing the year 42 points |
| America and others watched their stocks soar. The | | | | higher, at 1,939, than it opened. However, it would |
| financial corporations were also doing quite well. | | | | take two years to regain its 1987 high of 2,722 |
| Bankers began to float mutual fund companies and | | | | points. |
| money seemed like no problem at all. However, the | | | | There were some positive outcomes from the 1987 |
| stock market began to experience many unsettling | | | | crash however. Prior to 1987, most trading occurred |
| declines in prices which caused the subsequent Black | | | | over the phone. But after the crash, market makers |
| days. During this time period, no one did any trading | | | | stopped answering calls. Because of this, an electronic |
| at all. | | | | method of trading was developed. |
| When the market crashed all of the stocks | | | | There were two major times in history when the |
| plummeted to prices that sickened and frightened the | | | | stock market plummeted. In 1929, when the stock |
| investors. This crash caused a serious financial loss to | | | | market crashed it led the entire economy of the |
| investors and eventually led to the Great Depression | | | | United States into a Great Depression. Fortunately, |
| which caused even bigger blows to the portfolios of | | | | the United States did not suffer from a depression in |
| investors. The Dow Jones finally bottomed out in | | | | 1987 when the market crashed a second time |
| 1932. | | | | because this crash was short lived. |
| In 1987, the stock market crashed again. However, | | | | As history illustrates, there are definitely some risks |
| this crash was felt worldwide and is known as Black | | | | involved with investing in the stock market. |
| Monday. This decline went on for five days and | | | | Fortunately, there are also a lot of fortunes made |
| plummeted over 500 points on the Dow Jones. The | | | | through investing too. If you want to increase your |
| fear was that another 1930s depression lay ahead. | | | | chances of succeeding in something as big and |
| However, the investors and the market rallied | | | | complicated as the stock market, it may be wise to |
| together after the crash and immediately began | | | | find an expert to guide your early activities. |
| seeing gains of points the very next day. | | | | |