Question

Why did so many people invest in the stock market in the 1920s

Answer 1

This is because they thought it was safer to invest in stocks than deposits. They thought that stocks were underused at the time, and were safe to invest in. They would later lose their shares later that decade during the Great Depression.

Answer 2

They thought it was a good place to make money and it never went down for 8 years in a row so everyone thought there's no risk. They knew they weren't going to make a ton of money putting it into the bank. So in the stock market, you can take $5,000 and make it worth $10,000 in that time. So people thought they could get rich. However, there were too many small investors investing as well. They also borrowed money on leverage to invest in.