Can stock market crash again?

There are only few measures to prevent the type of crash that occurred in the stock market in the year 1929 or in 1987. The biggest question is can their be another crash? Or will the measures adopted really work? No one knows the answers for sure, but it is reasonable to assume that many people in this industry are working everyday to make sure that the disaster is not repeated again.

The stock market crash in the year 2000-2002 was quite painful, but if you think it was big enough, see the list of the ten worst crashes. It barely made to the list of the ten worst markets crashes in U.S. history.

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%

Investors lost 86% of their money over this 813 day beast. If you had $1000 on 9/3/1929 (beginning of the 4th worst crash, it would have gone down to a whopping $108.14 by July 8th, 1932 (end of the worst crash) or an 89.2% loss.

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%

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.

3rd Worst Stock Market Crash:

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%

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

4th Worst Stock Market Crash :

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%

It was the shortest market crash observed but the effects were deadly. Investors saw almost half their money disappear in just two months. Often this crash is the worst in most people’s minds.

The 5th worst stock market crash:

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%

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).

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%

DJIA records are not available before 1900. Take a look at the following facts to draw perspective of what things were like during this period.

  • 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

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%

This was another long market crash and people have remembered it for a long time. Think about the Vietnam and the Watergate scandal during this time.

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%

It took nearly 3 years to recover from this crash! With WWII and the attack on Pearl Harbor, the markets had a very tough time.

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 market during this period suffered about 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%!

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%

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.