5 Signs The Stock Market Will Crash

When it comes to stock market crashes, it isn’t a matter of if they will happen but when. Some of the more notable market crashes include the stock market crash of 1929 and the dot-com bust of 2000. Luckily, if you know what to look for, you can actually thrive during these tough economic times so now let me share with you 5 signs that a market crash is on the way!

So before we get into what signs to watch out for, let’s go over what constitutes a stock market crash. A stock market crash is said to occur when there is a rapid and unanticipated decline in the market index in a day or within a few days. A stock market crash occurs when a stock market index like the Dow Jones Industrial Index or the S&P 500 drops dramatically. This usually leads to panic as investors turn into sellers which further brings down the value of the stock market.

In essence, the stock market crashes as a result of a bubble being formed. A bubble is a rapid increase in the value of an asset usually above the real value of the asset driven by speculations from investors. When investors believe that an asset will perform well they will pour large sums of money into it. This triggers the increase in value of said asset and very soon, more people begin to notice and invest. Eventually, the value reaches a certain peak and then performance begins to decline. Panic sets in and investors…