10/27/2025
Trying to understand why we have market crashes is puzzling. We have had varying types of crashes for many years. Being a newbie in buying and trading has been a good experience; but, what I don’t understand is a person announces there will be a crash on a certain day and all of the people just wait till it happens and – some people make adjustments.. It would seem to me that an investigation would be appropriate to find the cause and then find a solution. A lot of money disappears into thin air.
It is time for DOGE to find out why we have crashes and let them develop a solutions.
Who gets the crash money?
We also have had crashes in the housing market and savings and loan area.
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There were 19 market crashes along the way, with varying levels of severity. Some of the most severe market crashes have included: The Great Depression, which began with the crash of 1929. This 79% stock market loss was the worst drop of the past 150 years.
Table of Contents
By
James Chen, CMT is an expert trader, investment adviser, and global market strategist.
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Updated September 07, 2025
Reviewed by
Fact checked by Kirsten Rohrs Schmitt
Part of the Series
Guide to Stock Market Crashes
What Is a Stock Market Crash?
A stock market crash is a rapid and often unexpected drop in stock prices due to major events, economic crises, or collapsing speculative bubbles. Public panic contributes to further falling prices, leading to significant economic impacts.
Famous stock market crashes include the 1929 Great Depression, Black Monday in 1987, the 2001 dotcom bubble burst, the 2008 financial crisis, and the 2020 COVID-19 pandemic.
Key Takeaways
- A stock market crash is characterized by a rapid, unexpected drop in stock prices and can result in a prolonged bear market or economic crisis.
- Fear and herd behavior among investors often exacerbate market crashes through panic selling.
- Measures like circuit breakers and trading curbs are in place to prevent severe market declines and stabilize stock trading.
- Historical stock market crashes, such as those in 1929, 1987, and 2008, have had significant economic repercussions.
- Large financial entities may intervene to stabilize markets by purchasing substantial quantities of stocks during periods of panic.
In-Depth Analysis of Stock Market Crashes
Stock market crashes are typically abrupt double-digit percentage drops in a stock index over a few days. Stock market crashes often make a significant impact on the economy. Selling shares during a sudden drop and buying too many stocks on margin are common ways investors lose money during crashes.
Well-known U.S. stock market crashes include the market crash of 1929, which resulted from economic decline and panic selling and sparked the Great Depression, and Black Monday (1987), which was also largely caused by investor panic.
Another major crash occurred in 2008 in the housing and real estate market and resulted in what we now refer to as the Great Recession. High-frequency trading was determined to be a cause of the flash crash that occurred in May 2010 and wiped off trillions of dollars from stock prices.
List of recessions in the United States – Wikipedia
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