1929
The Wall Street Crash
After years of rapidly rising prices, the U.S. stock market collapsed. On October 28 and 29, 1929, the Dow Jones Industrial Average fell roughly 13% and then 12% on back-to-back days. Prices kept sliding for nearly three years: by mid-1932 the Dow had lost close to 90% of its value from its 1929 peak. It did not climb back to that peak until 1954.
The lesson
Markets can fall much further, and stay down much longer, than people expect. Many investors at the time had borrowed money to buy stocks, which turned losses into disasters.