5 Reasons You Shouldn’t Worry About a Market Crash

While market crashes are inevitable, the bears' cries about near-term pain are off the mark

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5 Reasons You Shouldn’t Worry About a Market Crash

Market Crash Claim #1: It’s 1929 All Over Again

1929analog 300x172 5 Reasons You Shouldn't Worry About a Market Crash
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There’s a very scary chart making the rounds that has us on the precipice of another Great Depression. By overlaying the current rally with market action from 1928 and 1929, this chart does indeed make it look like we’re days away from another epic crash.

Have a look: it’s uncanny. (Chart credit: McClellan Financial Publications)

In the crash preceding the Great Depression, the Dow Jones Industrial Average fell 40% in a month! Are we sleepwalking into the same disaster? Nope. Happily, this chart says nothing like that at all.

For one thing, the economic environment of today is vastly different from what it was in 1929. More importantly, the axes and time frames on the chart aren’t lined up. Once you redraw the chart that way — as Quartz has done — the similarities completely disappear.

It’s just a couple of lines.


Article printed from InvestorPlace Media, http://investorplace.com/2014/03/market-crash/.

©2014 InvestorPlace Media, LLC

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