The Dow Jones Industrial Average (DJIA) dropped 22.6 percent that day, which was the largest drop in history until that point. I believe that we’ve seen a long, stretched-out bullish market. Predicting short-term market moves is impossible, but historical data certainly gives us some clues about what to expect. An investment of just $10,000 could turn into $30,000 in the next year, with dividends of $3,480 going by dividend history. Some believe it’s only a matter of time before the market crashes again, and they’re probably not wrong. The most obvious concern is the current surge in COVID-19 infections. Some believe it’s only a matter of time before the market crashes again, and they’re probably not wrong. In most years, the stock market goes up. Bad programming of early computer trading models was largely blamed for this drop. At the worst point in 1932, the stock market lost 89% of its value from the peak. There’s a good chance we’ll spend the next five years struggling with an economic downturn, and we’re heading into the worst month. Home prices will rise by 5 to 6% in 2021. David Lin Monday October 19, 2020 20:54. Since the beginning of 2010, the S&P 500 has undergone (at least) 15 separate pullbacks of 5.8% or more, with 11 of these swoons taking place in a span of 13 to 70 calendar days (two to 10 weeks). As Keith McCullough from Hedgeye — who successfully predicted the crash — says, “risk happens slowly then all at once. Government stimulus held the market up through the end of the year (or at least through the November general election). A Fool since 2010, and a graduate from UC San Diego with a B.A. ... possibly portending lower valuations on the stock market. Each of these indicators heralded the market crash of 2000-2003 and 2007-2008. It caused the federal government to step in with the CARES Act, which provided economic relief and kept the markets flowing. After all, the #1 stock is the cream of the crop, even when markets crash. In slow motion, the dramatic effects are not so visible to human eye – unless there is a flash crash. It wasn’t just October of 1929 that went poorly – the stock market crash of 1987 was similar in many ways. Here’s Marc Faber’s next stock market crash prediction. If a stock market crash does happen in 2021, as historical data suggests, be ready to go shopping. There are many irrefutable signs a US stock market crash is imminent. When much of the U.S. shut down during the spring, lawmakers were quick to pass a monstrous economic stimulus package to aid small businesses, the unemployed, and working Americans. If there’s anything you will learn from the market crash, it’s the rapid change in market sentiment. Women suffrage and the Harlem Renaissance pushed for equality, and prohibition was in full swing. Share this article: October 19, 1987 was a day of infamy for stock market traders. According to CNBC, Jack Ablin of Cresset Capital expects US stock markets to crash more than 15% early next year. With the Dow suddenly plunging 6% this week, investors are rightly wondering if we're on the verge of another stock market crash. Next 70% Stock Market Crash to Strike July 1, Economist Warns 70% Stock Market Crash to Strike July 1 Several noted economists and distinguished investors are warning of a stock market crash. US stock markets might have the best year since 1997 if the current momentum sustains. Since 1928, the stock market has forecast the winner of the election 87% of the time, including every one since 1984, according to LPL Financial. Between now and then investors better focus on getting maximum returns on the investing opportunities that present themselves! Next Stock Market Crash Prediction: Spring 2020 brought an unprecedented stock market crash that quickly rebounded to new highs. According to the survey, there are now 22% more bears than bulls in the stock market. A big enough spike in cases could trigger a stock market crash all by itself. Let’s explore the market and crash that led to the Great Depression. And when Bauman makes a prediction, he backs it up. Financhill just revealed its top stock for investors right now... so there's no better time to claim your slice of the pie. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Though the U.S. economy and stock market aren't joined at the hip, there are many external factors that could weigh on the market in 2021 and cause emotional traders to run for the exits. The data is even more convincing in recent years that we're going to see a sizable pullback in 2021. Economist who called 'Black Monday' crash of 1987 now has this forecast. @themotleyfool #stocks $^DJI $^GSPC, have not been factoring in the possibility of another shutdown, has eventually been put into the rearview mirror, Square and PayPal Shouldn't Fear Google's Fintech Push, Why Your 2021 Resolution Should Be to Buy More Cruise Stocks, The Stock Market Was Amazing in 2020 -- Let Us Count the Ways, 3 Top Artificial Intelligence Stocks to Buy in January, Copyright, Trademark and Patent Information. But not everyone agrees. This post may contain affiliate links or links from our sponsors. A synchronized cross-market crash that Guggenheim CEO, Scott Minerd, described as “the Great Leverage Unwind”. Still, history suggests that another stock market swoon is on its way -- possibly in 2021. Soon after the Great Recession, the U.S. stock markets plunged – and rebounded within 36 minutes. 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