The stock market crash of 1929 was one of the most devastating events in American history. The Dow Jones Industrial Average gained six-tenths of a percent during the calendar year 1987. This was the time of the great depression, in a decade that preceded World War 2. The Dow was only able to return to its pre 1929 levels after 25 years. The New Deal was the remedy to the Great Stock Market Crash and the Great Depression that followed. The selling became intense on Monday, October 23, and the market fell 6.3{606b15cb8282e5ec3580d0e72c193589ece6551be175750a8e347f0d91362e12}. By October 24, Black Thursday , the selling frenzy reached a critical mass and turned to flat-out panic. One purchaser-reportedly a messenger boy-bought a block of the stock for $1 a share. In the 1920s, the overall attitude was that the stock market could keep its bull market indefinitely. From the chart above we may see the extremely high volume surges during the recent crash.

While my response to the attendees’ question was a bit long-winded, the gist of it is that if you are concerned about a market crash that meets or exceeds 2008, the VIX is the indicator you want to follow. As with any sort of index, different VIX levels tell us different things about the market – that’s how we are going to determine when to be invested and when not to be. Markets were spooked by the Hatry Case in late September, which caused the British stock market to drop. A select group of journalists from The Wall Street Journal decide which companies are part of the most influential index in the world market.

The 500 largest U.S. companies as measured by their market capitalization are included in this index, which is compiled by the credit rating agency Standard & Poor’s. The Dow Jones even managed to claw its way back up partially between November 1929 and early 1930s. From there it spread throughout the western economy, bringing almost every market to its knees. It occurred on Black Tuesday, October 29, the day the stock market experienced the greatest crash in its history. Throughout a bear market, the only thing that affects a company’s falling share price is the downturn in economic and market conditions. If you can generate increasing and steady profits, investors generally reward you with higher stock prices.

The panic increased with the communication blackout and cause a stock market crash. Had you paid attention during 1999 or 2000 to a specific stock market prediction you could have avoided a significant drop in your retirement funds. By year’s end it would go up to around 290 and just before the Crash of ’29, it had a High of 381.

One of the biggest problems during the boom time of the stock market is that brokers were so confident that stocks were going to keep going up that they were allowing investors to buy stock on margin. Sooner or later the investor that left the market in the result of the recent crash will come back and start to inject funds into the stocks. For example, many cite the September 1929 passage of the Smoot-Hawley Tariff Act, which placed high taxes on many imported items, as a major contributor to the market’s instability. After the crash the New York Stock Exchange then implemented rules to limit the amount that a broker can lend to an investor on margin.