2022-12-28 08:01:50
The USA in the 1920s experienced an era of optimism: cars, electrical devices, and other technologies were everywhere in the country.Thanks to this, the Dow Jones Industrial Average increased tenfold, reaching its peak on September 3, 1929, at $381. And on the same day, the index began to fall as the economic bubble started to form.
By October 24, the index had already lost about 20%, and investors sold 12.9 million shares that day. The decline continued and reached 89% when the index closed at $41 – the lowest value of the twentieth century.
It was the most devastating stock market crash in the history of the United States.
So, what is the main lesson investors should learn from it?A financial crisis happens when market participants ignore or underestimate risks, leading to asset depreciation. That is why, before entering the market, complete an analysis.
For example, even if you see that the price of an asset is rising, find out why there is such a reaction and how long it can last.
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