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Black Monday 1987: What is the probability of a similar crash today?
On October 19, 1987, “Black Monday” occurred on the global stock markets, a crash that sent the Dow Jones down by around 22.6 percent. The indices are now trading well above their previous levels again. But what is the probability of a similar crash of this magnitude today? According to a report by www.finanzen.net, “Black Monday” began in Hong Kong and then spread to European markets and eventually Wall Street. The triggers were high inflation, fears of interest rate increases by the US Federal Reserve, a high trade deficit in the USA and uncertainties in computer-based trading. …
Black Monday 1987: What is the probability of a similar crash today?
On October 19, 1987, “Black Monday” occurred on the global stock markets, a crash that sent the Dow Jones down by around 22.6 percent. The indices are now trading well above their previous levels again. But what is the probability of a similar crash of this magnitude today?
According to a report by www.finanzen.net, “Black Monday” began in Hong Kong and then spread to European markets and eventually Wall Street. The triggers were high inflation, fears of interest rate increases by the US Federal Reserve, a high trade deficit in the USA and uncertainties in computer-based trading. The Dow Jones fell 22.6 percent or 508 points and then took 15 months to recover.
The article shows that such a crash of this magnitude is less likely today. Security mechanisms such as automatic trading interruptions in the event of price declines of more than ten percent are intended to distribute price declines and remove panic from the market. While the risk of an “automation-driven stock market crash” remains, as seen in the flash crash of 2010, the impact has been limited.
However, experts point out that crashes like “Black Monday” cannot be completely ruled out and unexpected events (“black swans”) are possible. Investors should therefore pursue a conservative and aggressive investment strategy to minimize risks. A suitable strategy can be developed together with a financial advisor.
However, price losses also present opportunities as they provide favorable buying opportunities. The article also emphasizes that the stock market has overcome every crisis so far. However, investors should not underestimate the protection of their portfolio.
Source: According to a report by https://news.google.com/./articles/CBMirgFodHRwczovL3d3dy5maW5hbnplbi5uZXQvbmFjaHJpY2h0L2FrdGllbi9kcmFtYXRpc2NoZXItYWJzdHVyei1lcmlubmVy dW5nZW4tYW4tMzQtc2Nod2FyemVuLW1vbnRhZy0zNC0xOTg3LXdpZS13YWhyc2NoZWlu bGljaC1pc3QtZWluLXNvbGNoZXItYm9lcnNlbmNyYXNoLWhldXRlLW5vY2gtMTI5NDIz MTnSAaEBaHR0cHM6Ly93d3cuZmluYW56ZW4ubmV0L2FtcC9kcmFtYXRpc2NoZXItYWJ zdHVyei1lcmlubmVydW5nZW4tYW4tMzQtc2Nod2FyemVuLW1vbnRhZy0zNC0xOTg3LXd pZS13YWhyc2NoZWlubGljaC1pc3QtZWluLXNvbGNoZXItYm9lcnNlbmNyYXNoLWhldXRlLW5vY2gtMTI5NDIzMTk?hl=de&gl=DE&ceid=DE%3Adewww.finanzen.net[/link]
Read the source article at www.finanzen.net