The Crash of 2000
From September 2000 to January 2, 2001, the NASDAQ dropped 45.9%. A total of 8 trillion dollars of wealth was lost in the crash of 2000.
Causes of the Stock Market Crash:
1.Corporate Corruption.
2.Overvalued Stocks.
3.Daytraders and Momentum Investors.
4.Conflict of Interest between Research Firm Analysts and Investment Bankers.
On October 19, 1987, the stock market crashed. The Dow dropped 508 points or 22.6% in a single trading day. This was a drop of 36.7% from its high on August 25, 1987.
During this crash, 1/2 trillion dollars of wealth were erased.
Causes of the Stock Market Crash:
1.No Liquidity.
2.Overvalued Stocks;
3.Program Trading and the Use of Derivative Securities Software.
On October 24 (”Black Thursday”), the market lost 11 percent of its value at the opening bell on very heavy trading.In total, 14 billion dollars of wealth were lost during the market crash.
•U.S. homeowners lost a cumulative $3.3 trillion in home equity during 2008, according to a report from Zillow. (MortgageWire.)
•One in six homeowners is now underwater on their mortgage.
•The stock market erased $6.9 trillion in shareholder wealth in 2008.
Causes of the Crash:
1.Overvalued Stocks.
2.Low Margin Requirements.
3.Interest Rate Hikes. The Fed aggressively raised interest rates on broker loans;
4.Poor Banking Structures.
The primary issue with the stock market today as it pertains to individual investors is institutional / computerized trading. Small time investors don't stand a chance when the bottom begins to fallout.
Furthermore and touching on the national debt, inflation, tax increases, passed on cost of government regulation and devaluation of the dollar. These scenarios are simply a stealth tax on working class folks, decreasing net worth over a period of time. Although we find ourselves in a deflationary cycle currently. This could reverse course rather sharply given geopolitical/domestic issues such as war, increase poverty/increased government spending and job loss due to downturns in economic activity.
Sure, some are on top of their game, micromanaging portfolios. For the average working class, the evaporation in wealth typically comes through 401k and or home value.
Read more: http://www.businessinsider.com/2009/2/america-lost-102-trillion-of-wealth-in-2008#ixzz3WeBXDQko
http://www.businessinsider.com/2009/2/america-lost-102-trillion-of-wealth-in-2008
We are now a few months into 2015. Seven years since the last market correction. Markets have been driven upward due to ultra-low interest rates and trillion of liquidity pumped into the markets.
Markets have remained relatively high even when the not so Federal Reserve began easing it's liquidity into the markets primarily by European Central Banks latest announcement of their form of quantitative easing.
Folks should be very cautious in the months ahead.