Are We In For Another Crash?

Everywhere you look at the time you see the headline’ Crash In Stock Market’ followed by words of fear and uncertainty. Every news update on the radio, then television opens with the latest updates from the stock market. ‘Stock Market prices have been slashed’ or’ The Stock Market crashes again’. Never before in my life have I heard such out of control fear and reporting on a stock market crash. Stock market crashes have happened before and I can promise you that they’ll happen again but is this the worst crash in the stock exchange that we have ever seen? If you ask the media ‘YES’ but to be honest I do not really care. I think we should concentrate more on how to handle it instead of just getting ourselves stressed and fearful.

Because in reality this is precisely what it is? There are two main way to take advantage of this Crash in the stock market.

Understand how to make money from a falling market. You can pay for every stock market report etc. but I think you would all agree that for the last few months anyone could have seen that the contract was in a severe down trend. So without any stock market advice you would have had a very good idea that the stock exchange would continue to crash. What you probably do not know is that it is quite easy to take advantage of this situation and make truck loads of money. In fact professional investors love it when they see headlines such as’ Crash In stock Market’ because the market moves so quickly. Professional investors make more money during stock market crashes than at any other time. Why because they know how to take advantage of a Crash in the stock market.

Definitely things to be considered.

I can hear you saying ‘how do you take advantage of a stock market crash? ‘ Quite simply you buy ‘put options’ or as some call it ‘insurance’. I like to describe it like buying insurance for a car that you do not own-then when the car has an accident and looses half of its value the insurance company gives you half of the cars value in cash. I know it is a slightly weird concept but this is precisely what lots of people are doing. The best thing is that is quite legal and very easy. Could you imagine being able to buy insurance on a car that you do not own once you already know that the one who is driving that car is blind and loves going fast? It is most too great to be true.

More and more people were getting involved on the stock exchange by around 1925. Then in 1927, there was a really strong upward price trend. This enticed even more people to enter into the stock market. The stock market boom had taken off by 1928.

Widening The Stock Market Crash Discussion

At this point, the stock market looked like a place where virtually everyone thought they could become rich. The stock market had reached a fever pitch. Everyone thought they were an expert. Stocks were talked about everywhere. Tips were given by almost everyone. Lesson number one: Beware when the fever pitch is high, and everyone thinks they’re a captain of the stock market, getting richer by the day. Beware when everything seems too great to be true. Tips are given out by almost everyone.

In the Summer of 1929, the market surged ahead again, and all early warning signs were forgotten. From June through August, the stock market reached its highest price level ever. Nearly everyone thought it was a stock market heaven. This would never end. Lesson number three: When the market seems too great to be true, it probably is, and right at the least, a correction is coming soon.

The second way to take advantage of a crash in stock market prices is to simply buy when everyone else is selling. Now this is slightly scarier because even though some shares are worth half of what they were last year they still might keep falling. So you must be prepared to go through some short term pain. If you’re prepared to do this then the 2008 Stock market crash may truly be a once in a lifetime opportunity.