Some investors think they are doing very poorly in the stock market for seven or eight months. But the fact is that the decline suffered by the Ibex 35 in this period is almost negligible compared with the largest stock market collapse that occurred throughout history, which are:

10) Wall Street (1901-1903): -46%

The market was overshadowed by the assassination of President McKinley in 1901, combined with the effects of a severe drought that occurred the same year.

9) Wall Street (1919-1921): -46%

In this case, fear gripped the market was too overheated to the new sector of motor sport and that it had reached a saturation point in the sale of motor vehicles.

8) Wall Street (1906-07): -48%

The bags were frightened after the attempt by President Theodore Roosevelt to take control of the monopolies that had flourished in several industry sectors, especially rail.

7) Wall Street (1937-38): -49%

This collapse in prices was due to economic recession and doubts about the effectiveness of the “New Deal” of President Franklin D. Roosevelt.

6) London (2000-2003): -52%

The UK won the sixth place in the table with a 52% drop in the stock market between 2000 and 2003 following the collapse of the bubble in Internet and telecommunications companies.

5) Hong Kong (1997-98): -64%

The Hong Kong market collapsed spectacularly in 1997-1998 following the flight of investors from the assets of the emerging countries of Asia, including the very overheated Hong Kong stock exchange.

4) London (1973-74): -73%

The London Stock Exchange fell by 73% between 1973-1974 as a result of the dramatic increase in oil prices, the mining strike and the fall of the government of Edward Heath.

3) Japan (1990-2003): -79%

Third place in the ranking is for Japan with a 79% decrease during the long period between 1990 and 2003 by the bursting of the housing bubble followed by the nightmare of deflation.

2) Nasdaq 2000-2002: -82%

The second biggest collapse came from the U.S. Nasdaq technology index, which slumped 82% after the bursting of the bubble companies. DOT COM in 2000.

1) Wall Street 1929-1932: -89%

The crash on Wall Street leads the way with a drop of 89% between 1929 and 1932. The speculative bubble burst ruined masses of investors who had borrowed money to buy shares on credit and were caught without selling their shares (no buyers) and no money to repay the loans that banks were demanding.

Falls indicated refer to the average market although, of course, the collapse of many individual values was much worse.

The greatest stock market collapses are invariably preceded by a number of different very negative events are uncovered one after another. A crisis is not only sufficient to cause a crash. We need the confluence of several different crises to bring the market to its knees.

Obviously, the optimal time to invest is “maximum pessimism” when asset prices are low. But, even nonsense, the Exchange is perhaps the only market in the world where people are predisposed to buy when prices are high and sell when they are low. It’s human nature.


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