The Great Depression: A Quick History Lesson

A lot of investors think we are in a similar period today as to what it was back in the 1930's (the great depression). In this video we show you how the great depression occurred, what the market & economy did, and how we got out of it...

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The great depression, the longest, deepest, and most widespread depression of the 20th century. The economy crumbled, the stock market crashed, millions of jobs were lost, this was a nasty time. And what we’re going to do in this video, is go over exactly what happened in the great depression, and how we can relate this back to today. There are definitely a few things that need to be pointed out…

Now it all started with the roaring twenties. And we need to pay particular attention to this period because it’s very similar to what’s been going on over this recent decade.

The roaring twenties… This is what it all started with. The 1920’s was a period of great economic prosperity. People were recovering from world war 1, construction was beginning to take place all across the nation, innovation was growing, unemployment was getting lower and lower and more people were being able to afford things they usually wouldn’t…
Before world war 1 cars were a luxury good. In the 20s, mass-produced vehicles became commonplace in the US and Canada. This was largely thanks to Henry Ford and his model T. More than 15 million Model T's were sold from 1908–1927.

Not only this but other technologies were becoming more widespread. Radios were used to mass communicate and mass market, to large groups of people. This was not possible before. The cinema as the English would call it, started to boom. Aviation was becoming a thing. And the economy was beginning to thrive…

And because of this, people had jobs and excess money to spend. But they already bought the Ford model T. They bought the clothes and things they wanted. Where else could they put their money. Hmm, why not the stock market? My neighbor John just invested in the stock market, and he’s made a lot of money. I’m going do the same.

You see what you need to realize is that during this time, the stock market was on fire. Over those 9 years, the Dow Jones went from under 1000 points to 5,600 points… An increase of 5 times the amount…

It’s no wonder everyone thought they were 19th century investing geniuses and were not afraid to put all their savings in the stock market.

It’s kind of similar what’s been happening over the recent decade In the stock market…

Over this decade it’s gone up more than 3 times the amount, from 8,500 points, to 27,600 points. Just like back then everyone thinks that they are investing geniuses. But there’s only so long that that can go on…

And we all saw this in the very late stage of 1920 when things began to crumble… You had the cook, the janitor, your neighbor, every man and his dog investing in the stock market, as if the only thing it could do was keep going up.

But then when you looked at the economy, hang on, it’s slowed down. They aren’t selling as many model T’s as before, there was less construction going on, and ultimately less profit being made.

Than Thursday October the 24th 1929 come along which was about to be a very dark in the market. The bells rang in the morning and by the end of the day panicked investors had caused the market to go down by 11%. Imagine going on holiday for 1 day and then coming back and seeing 11% of your money down the drain.

Panic began to sink in. The janitor, the cook, your neighbor John, they realized they never fully understood what they were investing in and began to pull their money out of the market by the bucket load!

The week after, in a day which is now known as black Tuesday the markets fell by a further 12%, and the great depression had well and truly kicked off…

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DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.