3 years ago

How did speculative investing weaken the stability of the stock market?

1 answer:

7 0

Heavy speculation is a bad idea in any market since it has a tendency to inflate prices to unrealistic levels. That is basically what many investors prior to the Great Depression did when they thought the market would keep going higher and higher. They borrowed money, sold their houses, etc.. to buy into the stock market thanks to that kind of speculation without even considering the underlying reasons for why the market is there in the first place.

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Results are below.

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