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Stock Market Crash of 1929

The stock market crash of 1929 proved to be a valuable lesson for anyone that is interested in investing in these publically held securities. Not only was the event devastating for the individuals involved, but it remains the most significant event in the history of the stock market. It led to the Great Depression which took 12 years for the United States to see improvements and a lifetime for individuals to regain their losses. It wasn’t until the U.S. involvement in World War II until the effects began to subside on the Western economy. Before October 24, 1929, many people experienced a time of great wealth and prosperity.

Life during the roaring twenties was an exciting time in the history of the United States. With many individuals reaping the benefits of investing in the stock exchange, they established personal wealth that allowed many benefits. Even though life was good, many people began to speculate that the NYSE could not support the high levels for prices that were indicated within the market. Due to the hope of making more money, investors found themselves unaware when the stock market crash of 1929 occurred. This day became known as Black Thursday and began a month-long decline of stock value.

Part of the factors that led to the stock market crash of 1929 was a noticeable decrease in the price of real estate in previous years. This set the stage for an unstable market that continued to rise and fall unpredictably. Other factors were lack of financial regulations and excessive margin trading. While Black Thursday is historically the day that many investors remember, the early part of 1930 saw many more days with incredible declines. 1932 actually signifies the lowest levels that the market would achieve. It wouldn’t be until late in the year of 1954 when the values would return to the levels before the crash. After six years of incredible gains, 1929 saw the stock market lose 17 percent of its total value in the month of October.

Despite efforts by bankers on October 24, 1929 to prevent further losses, when word spread of the stock market crash of 1929, people started to trade in their shares. This led to increased losses which led to a panic that led to incredible loss of wealth. Despite efforts to curb this side, it wasn’t until November 13th when the stock market hit bottom from this initial crash. Even though 1930 saw improvements, further financial worries led to an all-time low value of the market of 41.22 on July 8, 1932. This was a total loss of 89 percent from the value before Black Thursday.