What if the stock market some how crashed and reset to 0?

Answer 1

I'd be screwwed for college. My money is in an RESP but the money is then put into stocks so it can become a large amount...so I'd be extremely angry.
let's hope this doesn't happen.

Answer 2

That depends upon the facts behind what you are calling "the stock market." There isn't ONE such thing, nor does "crashed" have any real meaning in this context.

0 (zero) in terms of corporate value (Assets - liabilities) moving in a short time period ("short period of time" = "crashing") for a massive index like the S&P 500, Dow Jones Composite, or MSCI EAFE is outside the realm of believable possibilities. Even for a poor index like the DJIA it strains the limits of rational thought; that is, you are talking about some fantasy like armageddon which defies rational discussion almost by definition.

So, to move to a rational plain, you are talking about the EXCHANGES shutting down (not "the stock market"). Please notice that this has happened in your life time (following 9/11/01) and the world just kept on rolling. GE did not stop trading just because the main US markets were down and the quote was 0. GE the company was generally unaffected in its day-to-day operations. And the economic value of GE certainly remained in the hundreds of billions of dollars.

My point is that the quoted price in the stock market has a relationship to corporate value, but only in the minds of some stock analysts is it the SAME as the net value of a corporation. Likewise the markets preform an important function in the economy, but they are not the same as the economy.

In the narrowest sense, a quote of $0.00 means that no one wants to buy at any price, but it does not mean that the economic value of the enterprise is worthless or without possitive economic value. If no one wants to SELL, it really isn't a big deal.

Answer 3

Hhahah it would not happen, because the market now factors in intangible value for example intellectual property (not like in the 1930). If some how it happened, The market would only see it as either an opportunity to buy and or the market would switch to a futures market so you would be buying stocks in the anticipation of adding value.

Answer 4

The price of stock is like the price of anything you buy, whats the price your willing to pay? Thats the name of the game

Stock prices go up and down because of buyers and sellers, when there are a lot of sellers, and few buyers, the price goes down to find buyers, if there are a lot of buyers and few sellers, the price goes up looking for a seller.

The market will not go to 0. The only way to do that is for armagedon to come and wipe wall street and every corporation off the planet.

The great depression happend because they borrowed on ther house and they could borrow up to 9X the amount of what they had. and because the stock market was going up, everybody bought into it. and people made a lot of money, until people started selling, they couldnt meet thier loan payments and people and many banks went bankrupt. and the FDIC was born. The FDIC, the SEC and many forms of government are here to protect against another great depression.

Sorry for the history lesson.

Answer 5

Everybody would buy at $0.01 and everybody would be a millionaire at the end of the day.

By everybody I mean everybody with a brokerage account and at least $2,000.00 aready deposited in their accounts to buy at least a few shares.

If their shares go all the way up to $10.00 then they would turn $2,000.00 into $2,000,000.00

I would buy 10,000 shares of Berkshire Hathaway (They cost over $100,000.00 right now) for $1,000.00 and I would be a billionaire at the end of the day.

Actually you could do a lot of money if you open a brokerage account at Zecco today and wait until the Stock Market crashes 15% (The Dow Jones Industrial Average drops to 11,900) and then buy the ETF DDM.

I don't know if the DJIA will drop to 11,900 in the future but I do know it will rise to 15,000 in the future.

I am a Portfolio Manager with over a decade of experience in the Stock Markets.

Answer 6

Well, the number that shows up in the Dow Jones Industrial Average or any other indices represents the weighted value of all the financial securities inside that index.

So, if the DJIA goes to zero, then all 30 companies of the Dow are non-existent, out of business with zero value. No customers, no assets, no nothing.

Likewise the S&P500 would mean all 500 of those major corporations are out of business.

Because of that, it's unlikely we'll see anything like this ever happen.

Answer 7

Great depression 2 here we come

Answer 8

You are not the only person that have ever thought of that question, so I'm pretty sure they have measures in place just in case that happens.........or let's hope so.

Answer 9

It would be the end of the world as we know it. So it's not worth worrying about.

Answer 10

Weird fantasy you are having . . .
Do you venture far from reality often ?

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