Understanding the Decisions to Drop The Atomic - amazonia.fiocruz.br

Understanding the Decisions to Drop The Atomic Video

The stock market is constantly moving, prices of individual equities rising and falling throughout the trading day.

What causes a stock market crash?

Whenever the majority of them — or a representative group of them, called a stock market index — takes an especially large dive, a panicked cry often arises:. But what causes them? And what are the after-effects? Here is a closer look at what a stock market crash really is and what you need to know before one impacts your portfolio. There are many definitions of what a stock market crash is.

The impact of a crash can vary as well. For example, on Oct. The crash was short and markets quickly recovered. At other times, the effects are widespread, and longer-lasting.

What happens when a stock market crashes?

The most notorious example is the Crash of Stock prices dropped first on Oct. Though not the sole cause, this crash was one of the contributing factors of the Great Depression, the worst economic period in American history, lasting nearly 10 years. Confidence in the economy, steady stock gains, and low unemployment are all drivers of bull markets, as these sustained rallies are known. As more and more stocks are purchased, prices go up — both of individual equities and of the stock indexes themselves.

Sometimes, crashes are due to several factors. One example is the Dotcom Bubble-induced Crash of It started with speculation.

Works Cited

A boom of investing in internet companies prevailed through much of the late s. E-commerce was the new frontier for investors and money flooded the rapidly evolving technology sector and inflated valuations beyond profits these companies could ever realistically provide.

Venture capitalists swooped in early to provide funding to dotcoms that were on the rise towards going public, quickly cashing out after their overpriced debuts. Excitement over internet tech and the future of business mixed with companies that had yet to turn a profit pumped up an economic bubble.

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Inthe Federal Reserve increased interest rates partly to stem the overheated investment activity and poor financial performance from dotcoms began to surface, bursting the bubble and throwing the NASDAQ index into a bear market. A recession began, which was exacerbated by the Sept. In between the economic uncertainty and the shadow of war, stocks crashed when trading resumed on Sept. The government had to step in with economic stimulus policies before the economy as a whole began to recover from two major blows so close together. There really is no way to prevent the stock market from crashing. However, governments have added safeguards to prevent severe drops and upsets in market stability.]