Stock Investing 101

The stock market crash of 1929 was absolutely horrible. Not only was it one of the worst periods all time for the American stock market, it was an awful time for America itself.

The stock market did very well throughout most of the 1920′s. The 20′s were referred to the roaring twenties after all. However much of the gains made during the 20′s were unfounded and irresponsible. There was quite a stock market bubble in the early to mid 20′s and we all know that bubble’s do not end well.

Herbert Hoover, the president in 1929 gets most of the blame for what went on in the stock market at that time. He did make many mistakes, most notably not aiding the economy enough and keeping interest rates high which restricted lending, but it was not all or even most of his fault. The truth is that sometimes these things just happen. The stock market tradionally returns around 10% a year, some years will be very good, some very bad, but most in the middle, that is just the way it goes. Sometimes presidents get too much credit for very good years and too much blame for very bad years.

Remember that the economy did not instantly rebound under FDR.