Stock Markets Exposed

How will a stock market crash affect me (I have no investments)?

I'm scared, If the market crashes what exactly happens to the everyman? Will it really turn into the 2nd great depression?

Public Comments

1. You won't be able to borrow any money... so no new home or car and credit cards will start charging even more in interest.
2. I doubt it! There is plenty of money going around and no-ones going to let the economy collapse! Stop worring and start buying stocks!!!
3. i wouldn't buy stocks if I were you, I would short them. Shorting is when you bet they will go down and you make money when they do. The market hasn't finished going down yet...
4. It depends on how long the market is down and what happens after the crash. It could cause higher unemployment and price rises. Unemployment and inflation actually went down after the 1987 crash.
5. In every way and in every manner, every person is dependent on the economy. From raw materials to manufacturing to transport, sale and consumption - every person is affected. From the world's richest people to any small town's poorest residents - every person is hurt or benefits in some way. THE BIGGEST DIFFERENCE: During the Great Depression, any person could buy stocks on margin. All they "investor" had to do was put up 10% of the stock's price. In 1929, when the market crashed, those folks who bought stock on margin , were required to pay for the other 90%. They couldn't do it. In fact, hardly anyone could do it. Today, rules and regulations are much different. They are much tighter and more restricted. An investor isn't really allowed to buy any more than he/she can actually afford. Yes, there is still margin [the ability to borrow using the trading account's balances], but its much more regulated and controlled. Thanks for asking your Q! I enjoyed answering it! VTY, Ron Berue Yes, that is my real last name!
6. It depends on how your set up, if you have plenty of cash and don't work you will be fine. If you are working for a large company, they may have layoffs to offset losses. Costs of living will creep up but for the most part you won't even notice.
7. You could lose your job. It's wise to save at least 50% of your salary for a rainy day.
8. The economy drives the stock market, not the stock market drives the economy. The stock market tries to predict how the economy will do over the next 3-9 months. This is why the stock market historically turns down before a recession starts and rebounds before a recession ends. You should be worried about a major economic slowdown from an employment standpoint if you have no investments. Depression seems unlikely, but the media has to have some type of emergency to get you to listen to the news. Unemployment is low by historic standards, for now, but that could change. It is the area that I am most concerned with. If unemployment stays low I think we have a very mild recession, if it increases then the chances of a longer, deep recession greatly increase, but would have to go through the roof to create a depression.