Tuesday, September 30, 2008

Top Ten Worse Stock Market crashes

Here's a list someone complied of the worse stock market crashes. Check it out here. shares.com.au

However, he didn't list
the 1987 Black Monday crash. IIRC, the effects of that crash lasted until 1994. The Black Monday decline was the largest one-day percentage decline in stock market history. The Dow fell by over 20% in a single day. By the end of October, stock markets in Hong Kong had fallen 45.8%, Australia 41.8%, Spain 31%, the United Kingdom 26.4%, the United States 22.68%, Canada 22.5%, and New Zealand 60%.


At Number 10: The Dot.com Crash - eg. Internet/High Tech/911 crash
10th Worst Stock Market Crash:
Date Started: 1/15/2000
Date Ended: 10/9/2002
Total Days: 999
Starting DJIA: 11,792.98
Ending DJIA: 7,286.27
Total Loss: -37.8%
The 10th worst market crash barely edged out the 1932 stock market crash as the 10th worst crash in U.S. stock market history. Being the most recent crash, it is the easiest for us to remember. This crash required the longest recovery time of all crashes in this list. The combination of the tech bubble bursting and the September 11th terrorist attack served a deadly blow to the stock market, but relative to markets past, this was a minor one.

At Number 9: the World War 1 Crash
9th Worst Stock Market Crash:
Date Started: 11/21/1916
Date Ended: 12/19/1917
Total Days: 393
Starting DJIA: 110.15
Ending DJIA: 65.95
Total Loss: -40.1%
The War in Europe which started in 1914 drags on with no end in sight. The market suffered a 40% loss. It's difficult to break even after a 40% loss. On a $1,000 investment, your portfolio went down to $600. To get back to $1,000, it would have to go up 66.7%!

1939 to 1942 Stock Market Crash: 8th Worst Stock Market Crash:
Date Started: 9/12/1939
Date Ended: 4/28/1942
Total Days: 959
Starting DJIA: 155.92
Ending DJIA: 92.92
Total Loss: -40.4%
Although this stock market crash only took the 8th spot, it was one of the most grueling. It took nearly 3 years to recover from this crash! With WWII and the surprise attack on Pearl Harbor, the markets had a very tough time.

1973 - 1974 Stock Market Crash: 7th Worst Stock Market Crash:
Date Started: 1/11/1973
Date Ended: 12/06/1974
Total Days: 694
Starting DJIA: 1051.70
Ending DJIA: 577.60
Total Loss: -45.1%
Another long market crash -one that many people still remember (think Vietnam and the Watergate scandal). This crash lasted for 694 days before bottoming out.

1901 - 1903 Stock Market Crash: 6th Worst Stock Market Crash
Date Started: 6/17/1901
Date Ended: 11/9/1903
Total Days: 875
Starting DJIA: 57.33
Ending DJIA: 30.88
Total Loss: -46.1%
This is the oldest crash to make the list (DJIA records are not available before 1900). To give you a perspective of what things were like during this time, take a look at these facts:
· Life expectancy in the U.S. was 47
· Only 14% of homes had a bathtub
· Maximum speed limit in most cities was 10mph
· Average wage was 22 cents and hour - avg salary/year was about $300
· More than 95% of all births took place at home
· Only 6% of the population had graduated from High School
· The #1 cause of death was Pneumonia and Influenza
· The American flag had 45 stars

The 5th worst stock market crash: 1919 - 1921 Stock Market Crash:
This crash followed a post war boom (Stock prices rose 51%). After the crash bottomed out in August of 1921, this decade saw tremendous growth in the stock market and the economy (often called the roaring twenties).
Date Started: 11/3/1919
Date Ended: 8/24/1921
Total Days: 660
Starting DJIA: 119.62
Ending DJIA: 63.9
Total Loss: -46.6%

At Number 4: The 1929 crash. The 4th worst stock market crash in U.S. History:
Date Started: 9/3/1929
Date Ended: 11/13/1929
Total Days: 71
Starting DJIA: 381.17
Ending DJIA: 198.69
Total Loss: -47.9%
Although this is the shortest market crash observed, it was a deadly one. Investors saw almost half their money disappear in just two months. Often this crash is the worst in most people's minds. This crash kicked off what we now know as the "Great Depression."

3rd Worst Stock Market Crash: 1906 - 1907 Stock Market Crash
This crash was called the "Panic of 1907." The U.S. Treasury department bought 36 million dollars worth of government bonds to offset the decline (and remember, $36 million translates to a much bigger number in today's dollars). It should also be noted that at this stage in time, the US was not even ranked in the top 10 of global world powers in terms of military and economic power.
Date Started: 1/19/1906
Date Ended: 11/15/1907
Total Days: 665
Starting DJIA: 75.45
Ending DJIA: 38.83
Total Loss: -48.5%

At Number Two: the 1937 - 1938 Stock Market Crash
Just when investors thought the market was finally good again, following a recovery of almost half of the great depression losses, the market plunged again due to war scare and Wall street scandals.
2nd Worst Stock Market Crash:
Date Started: 3/10/1937
Date Ended: 3/31/1938
Total Days: 386
Starting DJIA: 194.40
Ending DJIA: 98.95
Total Loss: -49.1%

At Number One: The 1932 Stock Market Crash
Worst Stock Market Crash Ever:
Date Started: 4/17/1930
Date Ended: 7/8/1932
Total Days: 813
Starting DJIA: 294.07
Ending DJIA: 41.22
Total Loss: -86.0%
This is the grand daddy of them all. Investors lost 86% of their money over this 813 day beast. This market crash combined with the 1929 crash, makes up the Great Depression.
If you had $1000 on 9/3/1929 (beginning of the 4th worst crash, it would fallen to $108 by July 8th, 1932 (end of the worst crash) or an 89.2% loss. To recover from a loss like that, you would have to watch your portfolio go up 825%! The full recovery didn't take place until 1954, 22 years later! Global economic panic sent people supporting extreme measures: like the Communist Party, or in Germany - Adolph Hitler - who had a simple solution to the whole crisis.

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