Crash time 4 crashes7/3/2023 ![]() They often follow speculation and economic bubbles.Ī stock market crash is a social phenomenon where external economic events combine with crowd psychology in a positive feedback loop where selling by some market participants drives more market participants to sell. Crashes are driven by panic selling and underlying economic factors. Stock price graph illustrating the 2020 stock market crash, showing a sharp drop in stock price, followed by a recovery.Ī stock market crash is a sudden dramatic decline of stock prices across a major cross-section of a stock market, resulting in a significant loss of paper wealth.
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