And yes, that was rather funny, I laughed when I heard it and really, I am not inclined to vote for the gentleman. The 1987 crash showed that regulation cannot prevent stock market crises, but rapid reaction by the Fed can minimize the effect. The selling became intense on Monday, October 23, and the market fell 6.3%. By October 24, Black Thursday , the selling frenzy reached a critical mass and turned to flat-out panic. Not including dividends, the Dow was flat from 1929 to 1959, and again from 1966 to 1995.
Average uncertainty about stock market returns increased by 11 per cent during the summer, and it increased again in October-November, by almost an additional 20 per cent. The peak in market indices took place in early September, and this was followed by a gradual but persistent drop. Even after the stock market collapse, however, politicians and industry leaders continued to issue optimistic predictions for the nation’s economy. You can certainly think that the market will crash – many do – but you can’t say so with any level of certainty. Although there is no specific threshold for stock market crashes, they are usually identified as abrupt double-digit percentage drops in a stock index over the course of a few days. That’s a longer run than nearly every other bull market except the tech bubble of the 90s.
The stock market crash crippled the American economy because not only had individual investors put their money into stocks, so did businesses. By 1932, the index of stock prices had fallen from a 1929 high of 210 to a low of 30. Stocks were valued at just 12 percent of what they had been worth in September 1929. The worst one day percentage fall of the U.S. stock market was on October 19, 1987.
This means that the average stockholder more than tripled the value of the stock portfolio he or she was lucky enough to possess. OMX Iceland 15 closing prices during the five trading weeks from September 29, 2008 to October 31, 2008. The effects of recent returns and volatility of the stock market index and the daily volume of trade of the shares of the DJIA, before and after the crash. Recent market volatility has sent stock market investors rushing for the exits and into cash. None of this makes the risk-return picture look great for buy-and-hold-only investors. Looking ahead, overly optimistic analysts who don’t know the price of a loaf of bread see earnings growth returning in the fourth quarter of 2015 along with record level EPS. So those that were claiming that one would not happen in 2015 are already wrong.
We argue that the post-crash association between volume and disagreement was dominated by the large increase in both right after the crash (a strong positive connection), and subsequent movements are of second order importance. It means relief for the poor and the jobless, recovery of the economy back to normal and reform of the financial system to avoid depression and encourage people to invest in the stock market again. There’s tons of evidence that people trying to jump in and out of the market at what they think are opportune moments do worse than they would have done had they just bought some stocks and forgot about it. On average prices had fallen to a mere 12 percent of their 1929 levels and only five stocks exceeded by one-third their 1929 prices. In such a case, the crash would have a negative effect on everyone’s expectations.