What is the Stock Market Crash? Stock Market Crash is a sudden dramatic decline in the share prices leading to significant loss of paper wealth. Forced to sell is the main characteristic of the stock market crash. Because it forces everyone to sell their stock market investments with significant losses.
I already Warned about “will the Stock Market Crash This Year” And also mentioned about Historical crash coming for Canada. And “WW3 and The World Markets” And also advised buying gold for double or triple returns. Well, Now Let’s learn what is the stock market crash?
What is the Stock Market Crash?
Wikipedia defines Stock Market Crash as “A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors”.
Investopedia Defines Stock Market Crash as “A stock market crash is a rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, economic crisis or the collapse of a long-term speculative bubble. However, public panic is a major contributor”.
Bussiness Dictionary Defines as “Precipitous and rapid decline (that may persist for months or years) in the prices of shares traded on a stock exchange, caused by panic selling. Stock market crashes are triggered typically by the loss of investor confidence after an unexpected event and are exacerbated by fear. They are usually preceded by a period of prolonged and high inflation, economic and/or political uncertainty, or hysteric speculative activity. They bring normal economic activity to a halt, wipe out the savings of millions of investors, and bring widespread misery in their wake, especially for the weaker and vulnerable sections of the society.
So Stock Market Crash is Vulnerable to everyone whether investor or non-investor. It is a result of Catastrophic events.
Effects of Stock Market Crash:
- Overnight wealth destruction.
- A sudden price drop in all the listed securities.
- Confusion to act to sell
- Uncertainty in the markets
- Normal economic activity to Halt
- Significant loss of wealth
Characteristics Of Stock Market Crash:
- It forces investors to sell the securities
- Stock Market Crash creates public Panic
- It catastrophic event leads to major destruction
- Tv channels are blaming Govt. Policy Makers etc,
Stock Market Crashes are normal periodical events in share market. Historically Sock market crash happened in every 7 years or 9 years. So, preparing for the stock market crash is important.
Stock Market crashes are good for markets they bring new heroes, they bring new opportunities, they bring new investors. But one must prepare for the stock market crash.