Another risk that can occur with the stock market is a “CRASH.” On October 19, 1987 the stock market plunged 508 points, or 22 percent of the total market value. It was the worst crash, since 1927 that signaled the Great Depression. A major reason for the crash was fear. The 1980s had brought large stock increases; people had been making fortunes on the huge surges in the stock market. People began to fear that the market wouldn’t be able to go up forever and eventually it would fall, and create what is called a correction. The fear began to accumulate around October 15th, when The Wall Street Journal published an article entitled, “Stocks May Face More than a Correction.” It talked about how fear of a correction would bring on a landslide. People began to listen, and big investment brokers began to worry as did the SEC and NYSE. They even talked about closing the market on the 19th when there was worry that the crash would come. Even though they decided to keep the market open, news of a potential collapse was the last step and that morning, began with a quick loss of around 150 points. Although, the market did rebound a little before noon, the landslide had begun, and the market was losing too fast to hold back. In the end, the market plunged, and after the closing bell rang in the NYSE, there was silence between the brokers. People were speechless, and were many broke (www.sec.gov).
In conclusion, you can see that when dealing with what we call “Wall Street” you have to remember that there are many things to understand. But even for those who do there are also things that occur that are not explained. The stock market is about risk and taking chances. Even though on a whole the stock market has always gone up there are many times that it can drop. This is why people need to manage their money and pay attention to the things going on in the world. It is wise to invest money is the stock market to make a good return on your investment, but it is also wise to only invest what you can spare. In learning more about the market, people can make wiser choices and make investing into a safer everyday activity.