Every twenty or so years stock market crashes – the last time Dow crashed was 1987 and this is 2007
Sam Adelton
Feb. 11, 2007

Interestingly, in the last 200 years, every twenty years the stock markets and economic business cycles have crashed. It happens any where between 15 to 20 years later. The largest one in the last century was 1929. The next one was 1946, seventeen years later. The next one was 1962 mini crash, sixteen years later. The next one came in 1987, twenty five years later.

Even if this bull market is a never ending one, a crash is due based on the above cycle. The crash can happen any time. Another interesting correlation from analytics is that whenever the time stretched beyond twenty years or equal to twenty years, the crash is massive. In that category are two well knows Dow crashes 1929 and 1987. In both cases there were massive losses.

The crash will happen between now and the next five years. The later it comes, the magnitude will be proportionately higher. Wherever the crash will take Dow to, it will somewhat fixed no matter when the crash happens. Let us assume that the crash will happen this year and Dow will fall 12,500 to 7,500 in a short period of time. If it happens in 2012, the Dow will most likely fall from 16,000 to 7,500 in the crash. What that means it may not be worth holding stocks now. Even if an investor believes in long-term stock appreciation, one can wait and but the stock much cheaper between now and year 2012.

Every twenty or so years stock market crashes – the last time Dow crashed was 1987 and this is 2007
Sam Adelton
What that means it may not be worth holding stocks now. Even if an investor believes in long-term stock appreciation, one can wait and but the stock much cheaper between now and year 2012.
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