There are two days in financial history should be remembered. One day is the Black Monday, the other day is a Tuesday, Black Tuesday. These are two days with big stock market crashes.
Black Tuesday was Oct. 29, 1929. It refers to a precipitous drop in the value of the Dow Jones Industrial Average (DJIA). The DJIA fell 12% in one day. Everyone on the New York Stock Exchange was caught in a vortex of stock-selling. This is the darkest day in the financial history of the US. Thousands of Americans have watched their lifetime savings fade in a few days, including the famous economist, Irving Fisher.
It is the most influential and most harmful economic event in U.S. history, and its effects have spread to Western countries and the entire world. Since then, the United States and the world have entered a decade of economic depression.
This stock market crash completely damaged investors’ confidence. Investors suffered heavy losses. Consumers’ desires were greatly diminished. At the same time, the crisis in the stock market and banks made it impossible for enterprises to find financing channels. Production was sluggish. Since the important position the US was holding in the world economy, its economic crisis has triggered the Great Depression throughout the capitalist world. Billions of dollars of wealth are put to waste, production is stagnant, and all industries are withered.
During the World War I, US was developing quickly and became the major economic power in the world. However, the country’s focus was on domestic industry rather than international cooperation.
That period of time was called Roaring 20s, the country was fueled by optimism that there were no wars anymore and good times had arrived permanently. Stock prices went up nearly 10 times higher than before.
However, the false boom ended on Oct. 29, 1929.
Black Tuesday was the beginning of Great Depression. Years later, Black Monday occurred. These are the two days of great stock crashes. For us, we should be cautious when investing and remember the lesson.