What is a Stock Market Crash?

The stock market declines or advances on a regular basis. Some of these swings back and forth are large. A market crash refers to major decline in stock prices. It happens every few years. The market will go down in price and continue to go down until equilibrium is reached. The market is a big auction. Occasionally, there will be less buyer excitement than seller excitement. The reason could be anything. Fear and greed are the basic emotions of the market. The prices will continue dropping until the point where there are equal buy orders and sell orders.

Can You Predict When a Market Crash is Going to Occur?

The market can not be predicted. At some point, there will be a market crash. That fact is guaranteed. There is no way, however, to determine whether that crash will be next week, this year, next year, etc. Even as it crashes, you do not know that it is a market crash. It could just be a correction.

The other direction is also impossible to predict. You can not determine the start of a market recovery.

Think of the market as being in a car looking out the rear window. You can see where the car has been but not where it will be.

As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. If you would like to submit a post to my blog, please contact me.

If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.