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Stock Market of the 1920's

By Jake Katzman and Logan Hinkle
by

Logan Hinkle

on 4 January 2013

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Transcript of Stock Market of the 1920's

By Logan Hinkle and Jake Katzman Stock Market in the 1920's In the 1920's The stock market in the 1920's was booming. Many people were buying stocks because investing in stocks was a good way to make quick money. People saw the stock market as a short-term investment, meaning they bought stocks and sold them quickly. Everywhere you went, someone would be asking or wanting to buy a stock. Buying on Margin When people couldn't afford to buy stocks at full price, a broker could sell the stock for a fraction of the price. The buyer eventually would have to pay the broker back. This made the stock market open to the lower class as well. Buying on margin was also very risky. Benefits and Disadvantages
of Buying on Margin If the buyer buys the stock off margin and the stock increases in value, it makes it easier to pay the broker back. However, if the stock decreases in value, the broker would have to issue a "margin call" which means that the buyer must pay the broker back immediately. In the 1920's, buying on margin was popular because people believed that they could make their money back no matter what. The Crash of 1929 The Difference Today Comparison to
The Great Gatsby Nick moves out to West Egg in pursuit of a career in stocks and bonds.
It shows how people lived before the stock market crash and how people were successful.
It is left uncertain in the book how Gatsby got his fortune, but a good guess would be the booming stock market at the time.
Wolfsheim is involved with some kind of "crooked" business, but it could have just been stocks. (He could of had a fix in the stock business.) Introduction to Stock Market The stock market is the organized trading of stocks. If you buy a stock, it gives you partial ownership of a company. If the company thrives, the stock value will increase in value, however, if the company struggles, your stock might decrease value. This makes buying stocks risky. In the 1920's, everyone was buying stocks. By early 1929, all Americans were buying stocks. It seemed like a safe investment. Companies were even buying their own stocks because businesses were succeeding. The great stock market crash happened in October of 1929, when stock values plummeted fast. This started a financial panic, and many people lost a lot of money. This was such a significant time because at the beginning of the year, it was known as the best time for stocks. When the crash hit, many people reconsidered their previous thoughts of a "safe" investment. The American view of the stock market is different today. People are not buying stocks as often. Americans today are afraid of the previous stock market crash as it led us into the Great Depression. People also do not wont to lose money quickly buying investing and losing stocks
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