A Brief History of The 1929 Stock Market Crash

The comments above & below is an edited and abridged synopsis of an article by Value Walk

On October 16, 1929, Yale economist Irving Fisher wrote in the New York Times that “Stock prices have reached what looks like a permanently high plateau.” Eight days later, on October 24, 1929, the stock market began a 4-day crash on what became known as Black Thursday. This crash cost investors more than World War I, and was one of the catalysts for the Great Depression. Fisher’s declaration went down as the worst stock market prediction of all time.

The article discusses risks and warning signs prior to the 1929 stock market crash; Black Thursday and Black Tuesday; what caused the crash; margin buying; lack of legal protections; overpriced stocks; sensational news headlines; the troubled London Stock Exchange; the Federal Reserve’s policy; what happened to investors’ portfolios; whether investors could have avoided the catastrophe; and whether it is possible to avoid losses in a stock market crash.

“The bad news is that stock market crashes are a reality of investing. Black swan events can and will happen. The good news is that while it is virtually impossible to reliably time the market, investors can still protect their savings from a crash.”

“One way to minimize the risks from a potential market crash is to capture a moderate amount of upside market growth while ensuring that savings are fully protected over the long term.”