Can u tell me why suddenly the share market crashes or crumbles?

Question

tell me 5 reasons atleast so that i can understand a bit.

Answer 1

they crash or crumble due to mass effect. when people their shares, the price of that commodity goes down, if other people see this and worry, they too will sell their same shares...this knockon effect causes stock prices to crash... in the opposite way, when certain shares are bought, their price goes up due t demand...

Answer 2

Hedge funds are offshore invesment vehicles that have insane amounts of money invested in them.  If for some reason they on eday that they decide they need a load of cash making liquid then they have to sell off assets on the stockmarket.  This flooding of shares being sold drives the prices down.

Another major factor is simply investor mentality.  If a share is performing extremely well then many investors jump on the band wagon and leap aboard hoping to capitalise on continued growth.  Unfortunately lessons are rarely learned - this is how the technology bubble of 99/2000 occurred, also known as the dot com boom.  So a share or fund ends up with so much money that it becomes sluggish and runs out of new investments to make to continue its growth.  It begins to perform poorly then as it reduces in value more & more people leap off in a reverse band wagon and enhance its plummet downwards.

The people that really make the money are those that have the sense to buy a stock when it is low & about to turn around and sell when they have made as much as they wanted to.  Rather than chasing a runaway bull upwards and risking having to ride a crash.

Only 2 reasons but big whopping ones...

Answer 3

Sloppy's Joes bartender, Key West, FL

Answer 4

For good research visit http://www.stock-flood.blogspot.com

so you can find out about that market dip

Answer 5

#1 Value of Monetary Unit

#2 Economy

#3 Global Events/Weather/Crisis

#4 Supply & Demand

#5 Employment Data

#6 Housing Data

and more....

Answer 6

From Indian context these are the major reasons :

Fuel Price Hike

Rising Inflation

Poor Agricultural produce

Fears from global economies going into recession

Answer 7

I think the big economic factor eg. recently subprime crisis may cause share market fall

Answer 8

market usually crashed because there are changes of fundamental, like high oil price. This cause price to go down, when price went down, people panic, and sell their shares, making price to go lower. Fear control people