Cheers!
Dennis Ng, http://www.HousingLoanSG.com
A stock market crash typically refers to when stock indices dropping by more than 20%.Originally posted by newleggy
Having been in the market for less than 10 years, I have always wondered when many people here mentioned the word "crash". I've never seen a crash, so how does it look like? I only know that the market goes up or goes down or trades sideways, but what is a crash?
Can you be more specific about it in explanation, for those who do not know what happens in a CRASH?
How are investors affected in a crash?
However, do note that some rubbish penny stocks would drop as much as 50% to 95% when market crashes.
Just take a look at historical stock price stransaction record to verify whether I'm speaking the truth.
In the Tech bubble crash, Nasdaq dropped by over 70% from over 5,000+ points to about 1,400 points. During the 1998's Asian crisis, STI index dropped by over 60% from over 2,000+ points to 800+ points.
Recently, we had the 10th Anniversary of the Asian Crisis. When I read some newspaper reviews saying that Singapore was not much affected I laughed. After 10 years of "time healing", people forgot what really happened. To say Singapore was not much affected is really a lie. Many companies went under, tens of thousands of people were retrenched, our stock market crashed over 60% and our property market crashed by 50%....I really cannot understand how anyone can put it as Singapore was not badly affected.
When a Crash comes, Wealth Re-distribution typically occur on a Massive Scale. In a crash, you would see those who were "rich" became poor or even bankrupt.
Of course for those people who are well positioned (have Opportunity Fund), a Market Crash actually represents a Rare Opportunity for them to scoop up bargains, and some of these people can move from Middle Class to become Rich. And the Rich might become even Richer.
Thus, important question we need to ask ourselves is should a Crash happens, how are we positioned financially ourselves?
Your answer to this question will determine whether a Crash means a Crisis to you, or would it be an Opportunity for you?