What does a stock market crash mean for the average person

Sudden widespread decline of stock prices

A stock market crash is a sudden dramatic decline of stock prices across a major cross-section of a stock market, resulting in a significant loss of paper wealth.

Crashes are driven by panic selling and underlying economic factors.

What happens to the economy if the stock market crashes

They often follow speculation and economic bubbles.

A stock market crash is a social phenomenon where external economic events combine with crowd psychology in a positive feedback loop where selling by some market participants drives more market participants to sell.

Generally speaking, crashes usually occur under the following conditions: a prolonged period of rising stock prices (a bull market) and excessive economic optimism, a market where price–earnings ratios exceed long-term averages, and extensive use of margin debt and leverage by market participants.

Other aspects such as wars, large corporate hacks, changes in federal laws and regulations, and natural disasters within economically productive areas may also influence a significant decline in the stock market value of a wide

what is a stock market crash

what is a stock market crash simple definition