Investopedia

Continue to Site »

Crash

Filed Under » , , ,
Dictionary Says

Definition of 'Crash'

A sudden and significant decline in the value of a market. A crash is most often associated with an inflated stock market. Causes for a crash may include an economic bubble in which securities, or other investments, are trading at prices far above their intrinsic value, or a highly-leveraged market in which debt is used to finance further investment. Crashes are distinguishable from a bear market by their rapid decline in a number of days, rather than a decline over a longer period of time. A crash can lead to a depression in the overall economy and subsequent bear market.

Investopedia Says

Investopedia explains 'Crash'

A crash is both an economic phenomenon and a psychological one. Investors who see a rapid decline in the value of a particular stock may sell off other securities as well, leading to the possibility of a vicious spiral marked by negative crowd behavior. In order to reduce the effect of a crash, many stock markets employ circuit breakers designed to halt trading if declines cross certain thresholds.

Articles Of Interest

  1.

    Bouncing Back From A Portfolio Hit

    If your portfolio has been knocked out, we'll show you how to come back fighting.

  2. Einstein's Stock Tips: Gravity and Growth

    Can applying the theory of relativity help you pick a stock? Find out more here.

  3. What Caused The Great Depression?

    Learn how government actions may have contributed to this major economic downturn.

  4. The Crash Of 1929 - Could It Happen Again?

    Learn about the series of events that triggered the Great Depression.

  5. How do investors lose money when the stock market crashes?

    Over the last hundred years, there have been several large stock market crashes that have plagued the American financial system. For example, during the Great Depression, stock prices dropped ...

  6. What is Black Monday?

    Monday October 19,1987, is known as Black Monday. On that day, stockbrokers in New York, London, Hong Kong, Berlin, Tokyo and just about any other city with an exchange stared at the figures ...

  7. The Greatest Market Crashes

    From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.

  8. Sell In May – Yay Or Nay?

    Seasonal timing in the market, best personified by the adage, “Sell in May – Go away,” has long been the subject of debate among investors. The question remains: Is there anything to it?

  9. Other Options For The Cyprus Bailout

    Find out the other options Cyprus could use to resolve it's financial troubles, since its proposal to tax bank deposits didn't work out.

  10. The Cyprus Crisis 101

    Discover what's behind the Cyprus debacle and what investors should do about the situation.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center
Array ( )
taggroups(for debug only):
Array ( [0] => Economy And Economics [1] => Investing [2] => Markets [3] => Investing-Basics )