What Was Black Monday?


What Was Black Monday?

It has been nearly 100 years since the first Black Monday and started the stock market crash of 1929.

The expression “Black Monday” has a sinister look and sound, and for good reason. It was used to indicate four days leading to stock market crashes:

October 28, 1929
October 19, 1987
August 24, 2015
March 9, 2020.

Analysts still made the list, though they claimed it was a market correction rather than a collapse on Black Monday, August 2015. Each one happened for a variety of reasons, and here all have lows.

October 28, 1929

It has been nearly 100 years since the first Black Monday and started the stock market crash of 1929. Fate days, stocks fell 12.82 percent after a drop of 11 percent last Thursday. After people discovered that banks used their savings for Wall Street investments, they tried to get their deposits back. Banks were able to give back only 10 cents on the dollar, which caused people to lose their lives. Banks went bankrupt, people couldn’t buy houses and businesses couldn’t get loans. The Federal Reserve raised interest rates to maintain the dollar’s value.

October 19, 1987

To this day, the Dow Jones Industrial Average (DJIA) has dropped almost 22 percent in one day. This started the global stock market drop, and DJIA’s recovery took nearly two years. There were no major news events linked to the decline, but there were several events that led to panic among investors:

United States trade deficit widened for different countries
Programmatic, computer aided, growth in trade
Unrest in the Middle East (Iran and Kuwait)
A pressure on insider trading and corruption
There were also fears about an acquisition draft law brought in the US House of Representatives. He proposed the removal of loans provided to fund corporate acquisitions.

After this collapse, the Federal Reserve began to fund the country banks. At the end of October 1987, DJIA increased by 15 percent.

August 24, 2015

Dow dropped 1.089 today, right after the market opened. This was a 16 percent drop, but it started to rise and was 533 points lower than its opening. Although it was just after a 531-point drop on the previous Friday, this is considered a market correction. This was a result of concerns about China’s slowing economic growth at that time.

March 9, 2020

2015 was nothing compared to March 2020; Dow rounded 2,013.76 points (7.79 percent) on March 9. 12 days later, three days later, another 2.352.60 points dropped (9.99 percent); March 16 saw the biggest point loss in history, down 2,997.10 points or 12.93 percent. This is higher than Black Monday fall, which was 12.82% in October 1929.

This last drop was the result of global fears about the COVID-19 outbreak, a possible stagnation and drop in oil prices. On February 12, 2020, DJIA had reached a record level of 29,551.42. The 11-year bull market run of the market effectively ended.

What Next?

Anyone who invested in the stock market saw their assets depreciating. However, panicking and selling stocks posed risks because it is difficult to know when to re-enter the market. This can be harmful in the long run. Balance.com said the bear markets were on average 22 months, and some were as short as three.

Most financial advisors recommend waiting, and many advise customers to buy stocks now, as prices are low. The 2020 stock market collapse is unprecedented, but history has shown that these strategies are good. In any case, it is also necessary to collect at least three to six months of living expenses.

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