The stock market has long offered investors a way to make their money grow. Although this is not always guaranteed, the appeal of the market has continued for years.
The novice investor may be deterred by the many stories of past stock crashes that have seen investors lose everything. While there have been many times when the stock market has been affected by world events and financial crises, people are still interested in playing the markets for the next big thing.
Historical Stock Crashes
The stock market has always been affected by things that are happening around the world. People will take their money out of stock when they believe the market is going to change. Many external factors can change stock prices, and there have been some significant crashes over the years:
1929 Wall Street Crash – This was known as the Great Crash and led America into the Great Depression.
1973 – The UK stock market crash lasted for over 2 years. The miners’ strike and the fall of the then government led to the crash.
1990 – The invasion of Kuwait caused oil prices to increase, leading to a recession in America, and affecting the stock markets.
2008 – Failures of banks and financial institutions in the USA and Europe caused a huge change in the market, and precipitated one of the biggest global financial incidents in recent history.
Stock Market Boom
Just as the stock market will experience crashes, there can also be booms or bubbles. The rising popularity of technology, and a huge increase in internet companies in the 1990s, caused a huge surge in the market. Many investors jumped on the wave and rode the dot.com bubble, which saw many people enjoy huge returns on investments.
Many savvy investors will take advantage of a crash in the market. The low price of stocks is seen as a prime time to put your money in and wait for the inevitable rise.
The stock market is a volatile beast; there are many things that can affect stock prices, and not all of them to do with finances.
Researching past booms and crashes, keeping up with current events, and reading as much material as possible on investing are good ways to ensure you are educated enough to make your way through this type of investment.
Although previous performance and crashes may make you cautious or nervous about investing in stock, there is still plenty of opportunity for financial growth in stock.
The market ebbs and flows, with new companies coming in all the time as markets and technologies emerge and evolve. There is always a new opportunity to invest and ride the wave of a new boom in the industry.
The market, and investing in stocks, may feel complex and daunting, but, if you do lots of research, you can make your way through this exciting investment opportunity. The stock market may have seen crashes that have made people more cautious, but there is still money to be made and, as it recovers, investors return to it.