Stock market crashes are rare, but nothing new. Most famous are the huge one-day crashes of 1929 and 1987 and more recently, the train wreck that was the GFC in 2007-8.
While the exact cause of each of these crashes can get a bit complicated, stock market crashes are generally caused by some combination of speculation, leverage, and several other key factors.
Here’s a rundown of five different stock market crash catalysts that could contribute to the next plunge in the market.
Many stock market crashes can be blamed on rampant speculation. The Crash of 1929 was a speculative bubble in stocks in general. The crash in tech stocks in the early 2000s followed a period of irrational speculation in dot-com companies. And the crash of 2008 can be attributed to investor speculation in US real estate (and banks enabling the practice).