Stock market crash of 1929 to 1933.

Let's have a look at the story of the 1929 stock market crash. Now I’m sure you’re familiar with the roaring twenties as they were called because it was a boom time with plenty of money exchanging hands, mainly due to world war one and all the industries that sprang up out of war. So let's have a look at a couple of background events starting in 1921. When you have the first commercial radio broadcast in America. Now as you know today mass communications is very important to our society and radio certainly caused an explosion in information, the Dow Jones industrial average went up over 50 points during late 1921 and early 1922. In 1923 and 1924 the market moved sideways trying to break the hundred point barrier of resistance, but it wasn't until January 1925 when the Dow Jones went to 125 points that it had firmly broken the resistance of 100. Another major event that significantly shows the times was in 1927 when Lindenberg flew across the Atlantic, the spirit of adventure and prosperity was reflected in the stock market's performance from 1927 to 1928 the stock market went up 50 points closing at over 200 points for the year.

1928 was another good year with increased acceleration, the market going higher by nearly 100 points from 200 to nearly 300 points in one year, especially during the last quarter which is traditionally a very good three months for the stock market, that is October November and December. 1929 saw the market hover around 300 to 320 points for the first six months of the year than it moved sharply upwards coming to a rest around 340 points. After taking a breather it broke straight through the 350 barrier towards the 370 mark. That was the highest it had ever been in history, they called that time the beginning of a NEW ERA. There was also a record volume of shares traded which was over 16 million in one day but that was during the crash on heavy volume selling called BLACK THURSDAY when the NEW ERA ended dramatically. In the last quarter of 1929 that Dow Jones fell from its high of around 370 back down to 200 points, now you should've sold your stocks around the 300 mark at the very latest, 10% would have been 37 points, 5% would have been 18 points so we would have sold around the 5% mark ie around 352 points. Most investors however were in for the long haul and were leveraged on borrowed money which were two of the WORST strategies you can have.

The market moves in Five year cycles and once the cycle is over you should be exiting and looking for your next stock market target. There was a bounce back up during the first half of 1930 back up to around 300 point. This was the retracement by 50% and your second chance to sell at breakeven. Most didn’t. From the second half of 1930 to the second half of 1932 the Dow Jones steadily declined year on year from around 300 points right down to 45 points with devastating consequences. Millions out of work and the great depression set in throughout America and in Europe. Germany suffered hyper Inflation during 1933, where a 10 minute walk to the bakers shop could be very costly indeed. The prices were doubling ever hour! 1933 saw the Dow Jones moving sideways between 55 and 60 points. The stock market would not reach 370 points until 1954 nearly twenty years later that’s why it’s so important to get out and preserve your capital while you can during the beginning of a bear market.