The Impact Of The Recent Financial Crisis On 401(k) Account Balances (2)
Made on request of – the only source of volume and advance decline charts for indexes and exchanges. The point is to long at the market bottom when it starts to exudes heavy buying and to short at the market top when profit taking or heavy short selling manifest itself. Margin buying was another important factor in the rise in stock market investment. On October 23, the stock market lost thirty-one points, approximately seven percent of its value.
In the event of a disaster or bad news, especially on a global scale, when those sellers panic and sellout on a mass scale, stock prices plummet! In the aftermath of the stock market crash, the economy was further hurt by the tightening of the monetary policy by the Federal Reserve. From June 25th, 1929 onward it almost triples compared to a similar increase before stock splitting was introduced. Honeywell was removed from the Dow because the role of industrial companies in the U.S. stock market in the recent years had declined and Honeywell had the smallest sales and profits among the participants in the Dow. By 1933, unemployment had soared to 25 percent, up from just 3.2 percent in 1929.
On October 29, 1929, also known as Black Tuesday, the stock markets plummeted and continued to decline unrelentingly for a month. As stocks climbed in price, many Americans believed that they could amass a tremendous fortune, even if they owned only one or two shares of stock.
Production and consumption yaw back and forth, seeking equilibrium, overshooting, correcting, under-shooting, in cycles that impact everything from interest rates to opinions about the President to expectations in the stock market. One of the most famous and well known crashes was the Wall Street crash of 1929. On October 24th, 1929, stock prices dropped drastically so a lot of people started to sell their shares in an effort to cut down their losses. In this period there have again been many stock splits, particularly in the years 1997 and 1999. Many bear markets have occurred without being preceded by a stock-market crash and many stock-market crashes have occurred without the hint of a bear market. From the chart above you may see a rebound each time after SBV decline in August 2007, November 2007, January 2008 and July 2008. A reform of the financial system was essential to prevent a crash of such magnitude.
Unfortunately for many potential investors, these people did not have enough money to afford shares of stock. For example if I have $1000 and I wanted to buy $1500 of stock might broker would have lent me $500 on top of my original thousand dollars to reinvest into that stock. Mindless cheerleading from those in authority, who fabricated reasons for the market to increase when there were none. Yet, as soon as we start to see advancing SBV on this chart we may assume that the long- and mid-term traders start coming back which may lead the market up and which could be an indication of the rebound.