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Financial Market Crash

Financial markets across the globe have crashed repeatedly throughout history and a market crash is a nightmare for any potential investor. There are certain causes that lead to a market crash, including a high rise in stock prices over a considerable span of time. Economic optimism is the prime reason, as a consistent rise in stock prices lead towards crash.
A sudden crash can be the cause of agony, anxiety and frustration. All through stock market history, financial analysts and investment advisory service providers have failed to provide effective speculation regarding market crashes. Financial market crash may be due to certain specific economic reasons.

According to investorwords.com, a crash is defined as “a precipitous drop in market prices or economic conditions." (http://www.investorwords.com/1190/crash.html) This definition clarifies the sudden drop of a market crash and explains why many investors have been turned away from stock trading.

An abrupt fall in share prices can create panic among the investors, and confused investors tend to sell almost all of their shares. Shareholder's psychology changes and this leads towards confusion and chaos.
Stocks, securities and bonds are sold at random rates. To avoid the catastrophic effects of financial market crash, it is wise to keep an eye on the financial market trends.

The major causes of stock market crash are as follows:
  • A drastic shift in price
  • earning ratio
  • An alteration in earnings
  • Changes in dividend

Thus, a persistent boom in the financial market can collapse and result in a sudden crash. In addition to depending upon the advice of financial specialists, it is a good idea to keep an eye on the prevailing market trends.

The major financial markets crashes are as follows :

Year & Date

Name

2006

Great Arabian Crash

2005-(till date)

Iranian stock market crisis

October 2002

Stock market downturn of 2002

September 2001

post-9/11 crash

March 2000

Dot-com bubble crash

1998

Russian financial crisis

1997

1997 mini-crash

1992

Asian financial crisis of 1997

October 13, 1989

Black Wednesday

October 19, 1987

Friday the 13th mini-crash

October 29, 1929

Black Tuesday

October 28, 1929

Black Monday

October 24, 1929

Black Thursday

1929

Stock Market Crash of 1929

May 9, 1873

Der Krach

September 24, 1869

Black Friday

May 10, 1837

Panic of 1837

1819

Panic of 1819

Many investors stopped stock trading after being affected due to a financial market crash.




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