Finance

5 Biggest Stock Market Crashes in History

There is nothing that can make a bigger impact in the world’s economy than the stock market, and no matter if things change for the better or worse, they usually make an impact on hundreds, thousands, and even millions of people. When the stock market crashes, it usually makes irreparable damage for years to come, and there were some market drops that affected the whole world.

Even though there are some warning signs that show the market is about to crash, when we look at the history, we can see that in most times, even though we were able to predict this, there was nothing we could do to prevent it. Here, we are going to talk about some of the biggest stock market crashes in history and we’ll tell you what led to them.

1. Wall Street

img source: thebalance.com

The first stock market crash we are going to talk about is probably the best known in modern history. Some say that it was the start of the great depression, and refer to this crash with that name, while others say that even though it didn’t cause the great depression, it definitely left its impact.

The reason for this mishap was the overproduction, and the factories were producing more items than the market needed. This led to too many items, and no one to pay for them. The stocks dropped suddenly, and in October of 1929, the market lost more than four-fifths of its value.

The impact this crash had was felt all over the world, and even though it started in the United States, it was felt in Europe and other continents as well. The world needed about five years to recuperate from this drop and it changed the way we handle our companies and stocks.

2. Dot-com

img source: tckmedia.com

We all know that conspiracy theorists predicted that the world will end at the beginning of the new millennia, but did you know that this is partially connected to the market drop that happened in 2000?

As you already know, the internet became widely used in the 90s, and even though it was nothing like the world wide web we know today, it still was the beginning of the modern-day era.

That year, every company that had a dot-com website surged, and that was more than 75 percent of all the firms. Many business places including toys.com and pets.com completely lost their companies, and they filed for bankruptcy.

Even though this made an impact on the overall market, things quickly came back in place, and no more than a few years later, the market stabilized. However, this drop made irreplaceable damages for millions of individuals.

3. Coronavirus

img source: entermediadb.net

We are living in this market crash currently, so it is definitely worth mentioning. At the end of 2019, the coronavirus appeared first in China, and soon after it spread in Europe. No more than a few months after the first case, this virus spread all over the world and the global pandemic was announced.

Many business places had to put a lock on their doors, and many of them could not recuperate even after opening their shops up.

Some of the latest reports suggest that more than 150 million people lost their jobs all over the world, and there are almost 3 million people who lost their lives. The terrible thing about this is that we are still not out of this crash, and everyone is still impacted by the market drop.

Some of the things that do help today’s market and that help people make the right investment is the internet, and you should read more about the companies you want to invest in before you make your final decision.

4. Great Recession

img source: cumanagement.com

During this drop that happened in 2008, the United States financial sector almost came to a total collapse, and not too many people were aware of this. Even though everyone knew that the stock value was drastically dropped, we were not all aware of the possible dangers that could have happened.

There were many reasons that led to this drop, and probably the biggest one was the mortgages and the overall housing sector. Most of the homeowners were not able to pay their rates on time, and even though this was predicted a few years before, the investment risks had a huge impact on the whole situation.

The government funding, later on, helped with this problem, and things slowly started to go back to normal.

However, this stock crash impacted thousands of individuals, and many people lost their homes.

5. Chinese market crash

img source: wsj.net

The last thing we are going to talk about is the drop that happened in 2015 and 2016. It is reported that this led to more than 3 trillion dollars in losses, and people started panic-selling many items that even contributed to this problem.

Even though the Chinese government tried to prevent, and even help with the impact this drop had, their efforts were to no avail. The reason for this stock market crash was the devaluation of the monetary system in China, and the yen suffered irreparable losses.

However, this economy managed to recuperate, and even though it made an impact on the whole country, and even the world, the Chinese economy is still one of the largest ones in the world.

It is said that most of these drops were easy to predict, but the problem is, no one wants to act or do anything before the worst happens. Market crashes happened ever since the stocks became known and used, and there is nothing we can do to make sure that these things never happen again. Nevertheless, this does not mean that we need to give up, and with today’s technology, it is much easier to predict things and make the right type of investment. If you plan on investing in anything, you need to make a well-rounded decision, do all the research you can, and you need to follow everything that is happened in your country, and all over the world, so you can act fast if needed.

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