Stock market crash can be catastrophic for an investor .In the history of stock trading; stock market crash had been a repetitive issue.A sudden drastic fall of stock prices not only creates agonies and anxieties among the investors and financial analysts but also it largely affect diverse economic factors.
A prolonged tenure of rise in stock price can suddenly lead to a stock market crash, this happens after reaching the economic optimism. Market speculations fail and crashes happen all of a sudden. Over the years market crashes have drove away many investors from stock trading.
There may be several causes behind stock market crashesand there are no specific definitions of stock market crash. According to investorwords.com, stock market crash can be explained as A precipitous drop in market prices or economic conditions. (http://www.investorwords.com/5967/stock_market_crash.html).
As a result of stock market crash, the prices of the stocks suddenly go downhill.Sudden stock markets crash leads to confusion and chaos and the stockholders start selling stocks at a random rate.
Some of the following factors lead to stock price optimism:
Dividend amounts and changes in dividend
Earnings and changes in earnings
Psychology of the shareholders changes and a massive change in the crowd behavior become prominent during a market crash .A stock market boom can come to an end with a market crash. So, it is prudent to keep an eye on the market trends.
Last Updated on : 26th August 2013