Stock market isn’t crashing right now. A sudden drop in price doesn’t qualify to be called a crash. Indeed Dow Jones Industrial Average dipped by as much as 10.4 percent last week. It could be called a correction—a big correction.
However, many experts believe that US stock market could very well on a brink of a crash that could possibly trigger a global recession. For example, a London think-tank, in its report, predicts the price could fall by 40 to 50 percent. Similarly, many other experts and economists have been forecasting the same market fate, claiming the recent events parallels the development of 2008 crash. Many fear that the rising inflation could be the biggest reason on an imminent crash.
However, all being said, as of yet, there isn’t any concrete evidence that stock market is striding to a crash. All there is are theories by experts, which, of course, cannot be taken at face value. DJIA only dropped by 10 percent; in 2008 it dropped by 23 percent. So there’s still a big margin in between. Plus, the market, although experiencing high volatility, seems to be recovering.
So relax, the stock market isn’t crashing. As to why everyone is selling their stocks, well it’s FUD. With all the news of market crash in the mainstream media, investors and traders are in panic selling mode. If you’re an investor, stay strong and hold. If possible, follow the old school rule—buy the dip.