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Understanding Stock Market Crashes: A Comprehensive Guide
Investing in the stock market can be a rollercoaster ride. When the market is booming, fortunes can be made overnight. However, when the market takes a downturn, fear and panic can overwhelm even the most seasoned investors. It’s essential to understand the nature of these market fluctuations, particularly stock market crashes, which can seem catastrophic but also pose significant opportunities for savvy investors.
Why Do Stock Markets Crash?
Firstly, it’s important to understand that stock market crashes do not happen without reason. Most crashes arise from a combination of three primary factors: