Stock market crashes still happen. But the risk is worth the reward. It's a good place to invest your money so that it grows.
Buying stock is a hell of a lot better than leaving your money in the bank with 0.05 interest rate and inflation and rising interest rates will not only kill that 0.05% but in a few years from now your $10000 in the bank will be worth less than $8000. So NOT investing your money and keeping in the bank is worse than not investing at all. Besides the economy today is quite different than 1929, regulators have learned a lot since the biggest crash in wall street history so much it's safe to say 1929 crash will not repeat again. Unless like in 2008 banks are still today cooking the books and selling loans they know are fake.
People buy stock because it has a high return on their money--much higher than bank interest. Also, after the 1929 crash, laws were enacted to help prevent such an occurence from happening again. In addition, many industries that buy stock have set up automatic "buy low" strategies which kick in when prices drop below a certain level, which helps balance out losses. That's not to say that stocks don't rise and fall because that's the nature of stocks, but a disastrous crash isn't likely to happen again.
The exception does not negate the rule. A "crash" is an exception that doesn't happen every year or even every decade. Besides, when it does happen, that would be a fire sale.
It's like asking why people drive cars when you could die.
With so many people unemployed, it's like asking why get a job if you're just going to get laid off? Your logic is flawed.
If you look at a chart of the 1929 or 1987 crash, you'll see that there were months of declines before the actual "crash." A crash doesn't just appear out of nowhere for no reason.
Nobody knows the future. But is it something to fear or something to plan for? Why fear it if you are as ready as you can be? How can you do your best or be prepared if you live in fear and avoidance?
Certainly there was great loss during the Depression, but you must realize that much of the great wealth of today was made by investing during that time period.
"You can ignore reality but you cannot ignore the consequences of reality."
Ayn Rand
"The only way to prosperity is through clarity and discipline." (unknown)
"If I have lost confidence in myself, I have the universe against me.
Ralph Waldo Emerson
An investment in knowledge always pays the best interest.
Never hold discussions with the monkey when the organ grinder is in the room.
My grandfather bought stock in a paper company in 1912. He probably paid a few thousand or so for it. He held it through the depression and it was eventually passed to his heirs. That stock is now worth millions.( don't exactly how much but at least 10 million. ) My mother, who got 1/4 of the stock was collecting $80,000 just in dividends every year. If you have patience, stock can make you quite well off.
Investing means to put out money now in the hopes of getting more back later. It is unlikely that the crash of 1929 will recur.
The economy and a portion of tax dollars are generated from securities and debt investments. Investing helps drive the economy and is healthy for everyone. The problem is when companies find loopholes in laws and decide to do what is best for them and not the economy.
Just like when some finance companies asked for Federal aid in 2008 and then authorized bonuses for their executives.
Life is all about chances. The stock market always advance overtime. Invest using dollar cost average as well as having a diversifed portfolio. You should be fine.
Take Care
I wasn't around in 1929, so it's impossible for me to remember back that far.
But that can't happen again.
What can really happen is much, MUCH worse - but for different circumstances and different reasons.
But to answer your question about why people buy stock - and that is to make money. Mostly.
some people have other strange reasons, but the number one reason is to make money.
The 1929 did not just affect investors!!!
What do you mean "remember"? How old do you think we are?
Remember what happened in 1929? Couldn't that just happen again and then your screwed? I don't know much about stock, so sorry if this was a stupid question.
If you keep cash, then inflation will reduce your purchase power.
