The prospect of the Dow Jones Industrial Average falling 5,700 points in one day may seem ridiculous. But is it?
On Black Monday, 31 years from last Friday, the Dow Jones Industrial Average DJIA, -0.05% fell about 23%. If the same percentage drop were to happen today, it would be about 5,700 points. I lost millions that day, and so did many others. Of course, today is not 1987.
Some of the most dangerous words in investing are “this time it’s different.” Basic human emotions of greed and fear that drive the markets do not change.
Here are the biggest dangers to the stock market that can precipitate a quick, big decline.
-Federal Reserve policy mistake
P.S. Learn to short-sell. In short-selling, money is made when stocks fall
a sea of red