List Of Stock Market Crashes (1637-2022)

Stock Market Crash Vs Bear Market

The distinction between the two is based on speed and length. Speed indicates how quickly the declines occur & length indicates how long they last.

Stock market crashes are quick and short, whereas bear markets are slow and prolonged. Those two do not always occur in the same decline.

What caused the stock market to crash?

Stock market crashes can occur for a variety of reasons, including economic recessions, financial crises, geopolitical events, and even natural disasters. The following are some of the most significant stock market crashes in history:

• The Great Depression: The crash was caused by a combination of factors, including overvaluation of stocks, excessive speculation, and a credit boom, which led to a sharp decline in stock prices and a widespread financial panic.
• Black Monday: A number of factors contributed to the crash, including programme trading, investor panic, and global economic uncertainty.
• Dot-com bubble: Excessive optimism and belief in the transformative power of the internet fueled the bubble, resulting in a rush of investment in technology companies with little regard for traditional valuation metrics.
  The bubble, however, eventually burst in 2000, when investors realised that many of these companies were not profitable and could not sustain their growth.
• Financial Crisis of 2008: A number of factors, including the housing bubble, the subprime mortgage crisis, and excessive risk-taking by banks and financial institutions, led to the financial crisis of 2008.

It should be noted that stock market crashes can be caused by a variety of factors and are difficult to predict. Investors should concentrate on diversifying their investment portfolios, developing a long-term investment strategy, and preparing for market volatility and potential downturns.

Market corrections vs crashes

When we say "correction," we're referring to a situation where the market experiences a drop of more than 10% but less than 20%. It's like a little bump in the road, nothing too alarming.

On the other hand, a "crash" is when the market takes a more significant hit, with a decline of 20% or more. It's like a sudden roller coaster drop that catches everyone's attention.

So, in summary, a correction is a moderate dip, while a crash is a more substantial decline. Understanding the difference can help us navigate the ups and downs of the market.