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10 Crashes of the US stock market

  • user  Nama.Cohen
    Nama.Cohen  Nama.Cohen

    Nama Cohen is a highly experienced professional with over 20 years of experience in the finance industry. She has a deep understanding of corporate finance and global-macro research, which she leverages to provide valuable insights to her clients. Nama is an accomplished buy-side trader who has a proven track record of generating significant returns for her clients.


A crash in the stock market occurs when there is a significant drop in stock prices. Typically, the term refers to stock market indexes that lose more than 10% of their value in a short period of time.
Here are the 10 biggest crashes in the history of the US stock markets:


10. Dot-com Bubble


In the year 2000 the markets began to fall rapidly. The deterioration was caused by two major factors: the burst technology bubble and the terrorist attack on September 11, 2001, which served as a catalyst and was the main reason for the slowness of reconstruction. The period of the fall was defined as 1000 days, during which the Dow lost 37% of its value.

See more at Dot-com bubble wikipedia

9. The 1916-1917 Bear Market


During the First World War, and after two very volatile decades in the financial markets, the US market suffered another sharp fall in 1916. This year-long decline caused the Dow Jones to lose nearly 40% of its value.


8. World War II Stock Market Crash


World War II, 1939-1942. The crash lasted about three years, and the markets suffered primarily as a result of the attack on Pearl Harbor and the United States' entry into the war. The Dow lost 40% of its value this fall.

See also how War affects the modern stock market

7. 1973–1974 Stock Market Crash


In 1973, the US stock markets began a painful decline. Following the oil crisis, the Watergate scandal, and the Vietnam War, a two-year decline began, with the Dow losing 45% of its value. Even the "safe" commodities took a beating this fall. An intriguing statistic concerning the market's fall is that, while the markets lost half of their value, the value of gold increased by 260%.


The main difference between the "Black Monday" crash in 1987 and the series of crashes in the 1920s and 1930s is that the main victims in this case were large investment banks rather than private brokers. Many of the symptoms that preceded the 29th collapse also occurred before the 87th collapse.


6. Panic of 1901


The most significant and oldest crash in US market history. The Dow lost nearly 46% of its value between 1901 and 1903. Although the period cannot be generalized as a modern trade period, a 46% drop in two years cannot be overlooked.

Also known as "The Rich Man's Panic"

5. Wall Street Crash of 1919


In 1919, a decline began, following which the markets began to rise at a dizzying pace. The decline in share values ​​that lasted two and a half years caused the markets to lose 46% in value. The investments in the 1920s that followed the crash were based on the margin buying method in which the investor borrowed money from the broker who in turn borrowed from the bank. The end of this investment method, which poured a lot of money into the markets, is already written in the pages of history.


4. Stock Market Crash of 1929


The most well-known crash happened in 1929. Although it did not result in the sharpest drop, the brutality with which it was carried out and the consequences of its impact on the US economy left countless scars in the minds of every American investor. Within two months, the indices had lost nearly half of their value. The "Great Recession" period followed the crash that began on Black Thursday.


3. Panic of 1907


The 1907 Panic Only four years after the first crash, the US market experienced an even more severe crash. The markets lost half their value during the crash, which lasted about a year and a half. The main feature of this crash was the need for the American government to intervene in the markets to prevent further deterioration.


2. The Great Recession of 1932


The great crash that occurred in 1932. When there was no more hope left and the USA was deep in the "Great Recession" came the big bad. In a period of just over two years, the American markets lost an unimaginable 86%.


1. Black Monday Crash


The crash occurred on October 19, 1987, on a day called "Black Monday", the Dow fell by 23% in one day, the S&P by 20.5% and the Nasdaq by 11%. Such a large crash in one trading day has never happened in history. Black Monday was preceded by a bearish week in which the major indexes lost around 10%.


The world has witnessed crashes whose magnitude and consequences are difficult to describe; if they had occurred in the United States, the consequences would have been global, and the country would have been in a recession for several years at best. For example, the Japanese Hang Seng fell by 91.5% in 1974, and the German stock market crashed by 97% in real terms between 1920 and 1922.

See All biggest stock market crashes worldwide

So I hope we won't have to witness another terrible crash in the near future but there is a saying that history always repeats itself.


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Please note that the article should not be considered as investment advice or marketing, and it does not take into account the personal data and requirements of any individual. It is not a substitute for the reader's own judgment, and it should not be considered as advice or recommendation for buying or selling any securities or financial products.




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