The stock and crypto market are not looking good. $SPY is down almost $80 and 16% from all time highs this year. Bitcoin is down $30,000 from the all time high. If you had invested the previous year, you potentially lost a bit of money.
When stocks go up it’s called bullish, when they go down it’s bearish. In the past couple of years we have been spoiled with a bullish market. Unfortunately, that might’ve come to an end, and we might be seeing the beginning of the bearish market. In this article I’m going to let you know about what happened previously when the stock market crashed. History repeats itself.
1929 Stock Market Crash
The price of the DOW Jones rocketed from $64 to $381 from 1921-1929 in the Roaring 20s. On Black Monday, October 28, 1929, the DOW price drastically dropped 13%. The next day, 11%. Throughout The Great Depression the stock market fell 90%.
The problem was, too many people put all their money into the market with hopes of gaining a huge return. Too many loans were taken out by banks to use for funding the venture. Also, there were too many Margin Accounts. The stock prices could not hold the value that was perceived, it was unsustainable.
2008 Stock Market Crash
The market crash of 2008 was due to a bank collapse. Basically, mortgages were given out like candy from Investment Banks and also the Government. Mortgage lenders were also giving ill-termed subprime loans. In short, people were given houses that they couldn’t afford.
In September 2008, the market was down 20% from peak prices. $SPY dropped from the peak of $122 down to $53.
2020 Market Crash
This one should be in everyones recent memory. COVID, lockdowns, you name it. The year that will be historic forever. The deadly coronavirus caused the market to drop 12.9% on March 16th. A remarkable 37% was lost in the market from February 12th to March 23rd.
2 years later, and COVID is still here. There are chip shortages worldwide, wars are still going on, food shortages around the globe, all of these could be the next catalyst for a crash. Today we went under $400 for the first time since April 2021. Be careful investing at the moment, everything seems very volatile and we may see the markets bleed even worse in the near future.
