Boom-Bust Nature Of Stock Markets From The 18th Century To The 21th Century
The inception of the Amsterdam Stock Exchange in 1602 was motivated by a need to raise capital for the productive economic activities of the Dutch East India Company through the issuance of public listed shares.
Although the concept of share ownership is meant to create a win-win situation whereby a listed company is able to obtain capital for business expansion and investors can grow their wealth as the company's business scales up, it is easy for market participants engulfed by greed to drive the price of shares to ludicrous levels through trading on the stock exchange.
Every greed driven stock market bubble eventually comes to a lamentable end when fear sets in after prices reach a pinnacle- the point where buyers are no longer willing to pay more for purchasing the shares- and traders scramble to exit the stock market, creating a downward spiral in prices.
Below are links to articles about five massive stock market bubbles from the 18th century to the present:
1987 'Black Monday' Stock Market Crash
The US Housing Crisis And Stock Market Crash in 2008
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