How many points did the stock market lose in the crash of 1929?

Question

Also, how much wealth was lost in terms of money during the crash? Can anyone explain what the overvaluation of stocks is? The stock market is very confusing to me, but I think it's wise to invest. Any help would be great.

I'm getting conflicting information. Online, I read that the 16 billion dollars were lost, but what you said contradicts this.

I also read that more than 500 points were lost.

Answer 1

At the 1929 high the Dow Jones Industrial Average stood at 380.33. By the time the crash hit bottom in 1932 the Average stood at 42.84. But you need to realize that the Dow Average was made of the the leading stocks. The average fall for the average stock was much much more. Many went bankrupt and of course the investors lost everything who invested in them. Heck, I doubt that anyone knows for sure how much money was actually lost during the crash directly from the crash. One thing you need to be aware of is that a dollar back then was not the same as a dollar today. A dollar then was worth about somewhere in the neighborhood of $50.00 today, mabe more. The most expensive hotel room in NYC then cost $5.00. What is it today, about $500 or $1000. Because of liberal margin requirements then, in the first week of the crash most speculators lost everything.

As for being wise to invest. I am in agreement with that statement. But one does have to be somewhat rational about investing. First of all part of a persons investment policy should be to have a cash reserve on hand for when the market does take one of its periodic 25% to 35% reevaluations. Secondly, when the market has a somewhat prolonged rise, that is a time to bank some of the profits--add to the cash reserves.

Overvaluation of stocks is when the average pe of the average stock rises greatly above the norm. I believe the average now of the S&P 500 is about 17. At times it has been above 25, and occasionally even higher. At other times it has been below 10. When it is below 10, stocks are cheap. When it is above 20 stocks are very expensive.

Answer 2

In the crash of 1929, almost 200 (actually closer to 175) points were lost by the stock market. In terms of money, almost 30 million dollars were lost during that week.

Overavaluation of stocks:

Answer 3

too much,Dow went from 400 to 145 points in a 3day period. put in a search for the stock market crash of 1929, all your answers are there.

Answer 4

there have been a number of factors. First, the international financial device grew to become into rocky because of the aftermath of international conflict I. Germany grew to become into certain by making use of the Treaty of Versailles to pay conflict repartition's to the British and French. Inflation grew to become into very intense and the Germans borrowed quite some money, with American banks being the distinctive best lenders to Germany, France and Britain as properly. interior the U. S., the boost of the 1920s regarded like it would in no way end and many persons wanted to take a place, even people who did no longer have waiting money. Securities rules on the time allowed shares to be bought on margin. This meant that they might "purchase" the inventory with in straight forward terms a small share of the proportion fee down and could pay the margin off while bought for a earnings. while the end results of the international extensive recession hit, U.S. money components began to tighten as loans to distant places countries have been referred to as in yet many have been defaulted upon. the consequence grew to become right into a drop interior the inventory industry that despatched investors panicking and while lots of the margin shareholders have been referred to as to pay the margin, they have been no longer able to accomplish that and many of them went bankrupt. the remarkable margins on such quite some shares made the shares especially much valueless and hence further approximately the favored crash of 1929 and the super melancholy.

Answer 5

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Answer 6

September 3rd 1929 the Dow peaked at 381.17 and hit a bottom on July 8th 1932 of 41.22

In todays terms thats equivalent to the dow peaking at 12200 and falling to a bottom at 1319.32

pretty scary if you ask me!

Answer 7

According to wikipedia, it fell about 90% between 1929 and 1932. "Points" doesn't mean much, since the overall numbers were so much lower then - total points drop was just a few hundred over that time.