However, the hard lesson they soon learned was that most of these companies were doomed to fail. Investors excited about the potential of investing in the “next big thing” threw their money into any company that had “.com” after it without abandon. What happened: The 1990s were a period of rapid technological development, and the commercialization of the internet caused valuations of internet-based companies to soar. It does, however, also teach us a more optimistic lesson as well – the market tends to recover quickly from even the most dramatic crashes. What we learned: What the Black Monday crash teaches us is that the market is a fickle beast, and sometimes crashes are almost impossible to predict. However, investors were still left badly shaken by the sudden crash. Surprisingly, the crash only lasted one day, and the market soon climbed back to its highs. While there were some ominous signs such as slowing economic growth and rising inflation, there was nothing in the economic climate that would have predicted such a sudden and significant drop. It was a drop that came out of nowhere, and experts are still largely in disagreement about what caused the stock market crash. What happened: Another one of the biggest stock market crashes in history occurred on October 19, 1987, when the Dow shed 22% in a single day, ending a five-year bull market.
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