Episode #22: Market Crash Hall Of Fame

Today’s Prep:

We’re always talking about market crashes on this show because everyone is scared of being in the middle of one. Today we’ll talk about the big crashes of the past and what caused them. Which crash do you remember?

(Click the featured times below to jump forward in the episode)

Equipping Points:

[00:43] – Black Tuesday – 1929

  • The roaring ‘20s led up to an expensive stock market.
  • People were borrowing money to buy stocks.
  • There were more sellers than buyers.
  • Brought about the Great Depression, which changed the lives.

[2:28]Dotcom Crash – April 14, 2000

  • Followed a decade of exuberance.
  • The poster child of the Dotcom was the Nasdaq which took a hard tumble.
  • At the time, there were a lot of internet-based companies with no profit or revenue.
  • Lasted until 2002.

[3:57] – Terrorist Attacks – September 11, 2001

  • This was not a classic crash.
  • The market shut down for an entire week after the attacks and opened up to a significant drop.
  • Went down fast and came back fast.

[5:08]Financial Crisis – 2008

  • Series of lower highs turning into lower lows.
  • David shares how clients went from big 401(k)s to big drops.

[6:48] – When is the next one?

  • Major downturns happen every 9-12 years.
  • No indicators to say a downturn will happen this year, but it’s harder to see ahead of time.
  • David knows some signs to show when we’re about to be in a major downturn.
  • People almost always underestimate the risk they are taking in their 401(k)s and IRAs.

Today’s Takeaway:

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More From David:

The host: David Dickens

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