Why did this 1929 event cause people who had not invested in the stock market to lose their savings?

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asked May 19, 2024 5.3k views

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Rasheen · Answer 1 · 2024-05-22T20:50:46+0000

Answer:

If the funds are not deposited, the broker is forced to liquidate the portfolio. When the market crashed in 1929, banks issued margin calls. Due to the massive number of shares bought on margin by the general public and the lack of cash on the sidelines, entire portfolios were liquidated. As a result, the stock market spiraled downwards.

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Why did this 1929 event cause people who had not invested in the stock market to lose their savings?

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Why did this 1929 event cause people who had not invested in the stock market to lose their savings?