stock market
Prior to the stock market crash in 1929 and Black Thursday, a day which meant financial ruin for much of America, the U.S Economy was experiencing a great boom. The stock market, a growing trend in the life of Americans, allowed almost every man to experience the American dream. Investing was something that almost every person could do, the thought of putting in a few hundred dollars one day and waking up the next morning with twice as much money as you had put in amazed people. Once they started they couldn't get enough. At the beginning of the 1920's approximately 1.5 million citizens participated in the stock market but at the close of 1928 survey's said the about 17million had taken interest in the stock market. Because of their success and that of so many others, people could not possibly see how the stock market could fail, they watched its growth day by day and saw themselves grow more and more wealthy. This is not to say however that no one paid attention to the increasing amount of warning signs. Many noted that the pace at which prices were rising could be potentially dangerous, however when they tried to warn the public, people thought they were crazy for thinking this amazing time of wealth and prosperity could come
Brokerage firms became a common thing with advertisements and competition for lowest interest and down payments of as low as 10%. The ability to buy stocks on credit helped the average person to do the same in hopes that they would make enough money to pay off what they charged and then some. At the start of 1928, the New York Stock Exchange was trading about 6. Because of this, people spent their entire savings on stocks and when the bear market began, many Americans who had been very wealthy during the climb, now had nothing. One thing that contributed to the feverish stock buying in the 20's was the beginning of the idea that a person could buy stocks on credit. Buying on credit allowed the average person to put a down payment on a house or car, and then pay the rest in installments or later on one bill. During this bear market, as an example the Dow Jones Industrial Average lost approximately 90% of its value within the first three years of the depression, this is just one instance in which the bear market, it's crash, and the depression effected companies. " In May of 1929, Time magazine noted something at could not have been more true. " Investor theory's were all well and good until prices are no longer rising. When prices drop however, whoever purchased the stock has to make up for the loss, because they have to sell them for less than they bought them for.
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