Guide to the Stock Market

eg: UK or Brides UK or Classical Art or Buy Music or Spirituality
 
eg: UK or Brides UK or Classical Art or Buy Music or Spirituality
 
Business & Money
Technology
Women
Health
Education
Family
Travel
Cars
Entertainment
Featured Sites
SD Editorials
Online Guide and article directory site.
Foodeditorials.com
Over 15,000 recipes & editorials on food.
Lyricadvisor.com
Get 100,000 Lyric & Albums.
  • Business & Money
    • A Guide to Business
    • Guide to Finance
    • Ideas for Marketing
    • Legal Guide
    • Guide to Insurance
    • Lettre De Motivation
    • Guide to the Stock Market
    • Human Resource Career
    • Sales Marketing
    • Forex & Trading
    • Advertising & Marketing
    • Startup Guide
  • Technology
    • Guide to Technology
    • Cell Phones
    • Computer Software
    • IT Hardwares
    • Internet
    • Online Security
    • Cameras
    • Search Engine Optimization
    • Science & Technology
  • Women
    • Guide to Women
    • Relationship Advice
    • Marriage
    • Jewelry
    • Pregnancy
    • Fashion Style
    • Divorce Guide
    • Wedding Guide
    • Dating Guide
    • Natural Beauty
  • Health
    • Guide to Health
    • Guide to Medical
    • Plastic Surgery
    • Weight Loss
    • Sports
    • Body Wellness
    • Cancer Treatment
    • Common Illness
    • Health & Lifestyle
  • Education
    • Military Service
    • Politics and Policy
    • Arts & Humanities
    • Education and Teaching
    • Learn Languages
    • Colleges & Universities
  • Family
    • Quality Home Improvement
    • Hobbies and Interests
    • Family Guide to
    • Pet Guide
    • Loans Guide
    • Credit Cards
    • Gardening Guide
    • Home Security
    • Real Estate
    • Home Decor
    • Gift & Present
  • Travel
    • The Travel Guide
    • Adventure Travel
    • Cruise Ships
    • Beach Holiday
    • Travel Accommodation
    • Holiday Destinations
  • Cars
    • Information on Cars
    • Traffic Violations
    • Auto Insurance
    • Trailers
    • Sport Cars
    • The Bikes
  • Entertainment
    • Entertainment Guide
    • World Music
    • Photo & Video
    • Television & Games

1929 Stock Market Crash

    View: 
Some economists regard the 1929 stock market crash as major contributing factor to the great depression. The speculative boom of the 1920's caused the crash because of the build up of the economic bubble. The bubble was formed because in the 1920s, as the stock prices were increasing, many people invested in the market. As the prices kept increasing they continued to invest hoping the prices would go up forever. Most people borrowed money to invest in the market.



This continued till about 1929. Then the market started trading down. Most people panicked and this resulted in heavy selling of stocks. By the year 1933, the stock prices were down 80% from the highs in 1929.

This led to people feeling poor. This led to decrease in the demand for various products in the market. Companies that tried to raise money in the market failed miserably. This led to shortage of money for manufacturing products or providing services. Companies started firing their employees because they wanted to scale down production. As you can guess, this led to the great depression. This period lasted about 4-5 years till 1934. All this was caused due to lack in confidence. This was preceded by confidence in the stock market. This turn of confidence was caused by a small negative sentiment in the market.

The speculative boom of the 1920's was one of the factors that contributed towards the great depression. The speculative boom was caused due to the heavy investing in the market. The heavy investing was taking place due to most people trading on margin. Some traders were trading on 90% margin. The banks were also invested in the stock market. When the stock prices went down, people lost faith in the entire financial system and this lead to banks failing by the hundreds. This could have been avoided if there were proper regulatory procedures for the banks and the stock market in place. There should have been a limit on the margin you can use to trade. There should have been some restrictions on the banks from investing the depositors' money in the stock market.

Needless to say, the regulators learnt a lot from this cash. It required some time before the trust in the financial system came back. The federal government then set up the federal deposit insurance corporation. Due to the presence of FDIC the banks could run out of money to pay back but still escape as the government reimbursed the depositors. The regulatory rules and procedures in place now are stricter and prevent the economy from crashing like it did in 1929.

You as an investor or a trader can learn a lot from this crash. In the late 1920's people began to invest without doing any research about the stocks they were buying. In those times, the trader who was in the floor had more information than the common people trading. This led to lack of information among investors. Now, due to internet and disclosure policies, the common investor can have all the information about a company before investing in it. Good research will give you confidence about your investment and you will not panic when your stock price goes down or the general market conditions are bad.
More Articles from
Stock Market Crash
1929 Stock Market Crash
After Stock Market Crash
Causes Stock Market Crash
Next Stock Market Crash
Stock Market Crash Depression
Stock Market Crash Of 1987
Stock Market Crash Of 2008
Stock Market Will Crash
The First Stock Market
The Stock Market Crash
The Stock Market Crash 1929
The Stock Market Crashes
Why Stock Market Crash 1929
» More on
Stock Market Crash
  • Related Articles
  • Author
  • Most Popular
•1929 Stock Market Crash, by Arkaitz Arteaga
•After Stock Market Crash, by Amit Malhotra
•Causes Stock Market Crash, by Alexander West
•Depression Stock Market Crash, by Reno Chris
•Next Stock Market Crash, by Nicky Pilkington
Arkaitz Arteaga has sinced written about articles on various topics from Stock Market Crash, Finances and Stock. Arkaitz Arteaga - Market Stock Visit our website if you are interested in stock market qu. Arkaitz Arteaga's top article generates over 49500 views. Bookmark Arkaitz Arteaga to your Favourites.
Addicted To Fast Food
When you ask them to be a part of your cooking ventures, whether these dishes are based on easy recipes, or elaborate ones, you will be giving them the first lessons in home cooking and in the import...
 
A Guide to Business | Guide to Technology | Guide to Women | Guide to Health | Family Guide to | Travel & Vacations | Information on Cars

EditorialToday Guide to the Stock Market has 3 sub sections. Such as Types of Funds, Guide to Investing and Penny Stock Investing. With over 20,000 authors and writers, we are a well known online resource and editorial services site in United Kingdom, Canada & America . Here, we cover all the major topics from self help guide to A Guide to Business, Guide to Finance, Ideas for Marketing, Legal Guide, Lettre De Motivation, Guide to Insurance, Guide to Health, Guide to Medical, Military Service, Guide to Women, Pet Guide, Politics and Policy , Guide to Technology, The Travel Guide, Information on Cars, Entertainment Guide, Family Guide to, Hobbies and Interests, Quality Home Improvement, Arts & Humanities and many more.
About Editorial Today | Contact Us | Terms of Use | Submit an Article | Our Authors