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This Padlet will cover topics such as past stock market crashes, causes of crashes and the outlook for the future.

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Subscribe! http://bitly.com/1iLOHml The United Kingdom recently arrested a man for allegedly causing the stock markets to crash in 2010. We wanted to know, what does it take to crash a stock market? Learn More: 'Flash Crash' Charges Filed http://www.wsj.com/articles/u-k-man-arrested-on-charges-tied-to-may-2010-flash-crash-1429636758 "A trader who operated out of his West London home was arrested by British authorities Tuesday on U.S.

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The stock market crash of 1929-considered the worst economic event in world history-began on Thursday, October 24, 1929, with skittish investors trading a record 12.9 million shares.

On October 28, dubbed "Black Monday," the Dow Jones Industrial Average plunged nearly 13 percent. The market fell another 12 percent the next day, " Black Tuesday." While the crisis send shock waves across the financial world, there were numerous signs that a stock market crash was coming. What exactly caused the crash-and could it have been prevented?
WATCH: America, the Story of US: Bust on HISTORY Vault
A Stock Market Peak Occurred Before the Crash

During the " Roaring Twenties ", the U.S. economy and the stock market experienced rapid expansion, and stocks hit record highs.

The Dow increased six-fold from August 1921 to September 1929, leading economists such as Irving Fisher to conclude, "Stock prices have reached what looks like a permanently high plateau."

The market officially peaked on September 3, 1929, when the Dow shot up to 381.

By this time, many ordinary working-class citizens had become interested in stock investments, and some purchased stocks "on margin," meaning they paid only a small percentage of the value and borrowed the rest from a bank or broker.

Additionally, the overall economic climate in the United States was healthy in the 1920s. Unemployment was down, and the automobile industry was booming.

While the precise cause of the stock market crash of 1929 is often debated among economists, several widely accepted theories exist.

WATCH: Full Episodes of The Titans That Built America online now.
The Market-And People-Were Overconfident

Some experts argue that at the time of the crash, stocks were wildly overpriced and that a collapse was imminent.

That same sense of reckless overconfidence extended to average consumers and small investors, too, leading to an "asset bubble." The crash happened after a long period of rising market growth that led to consumer overconfidence.

In fact, after 1922, the stock market had increased by nearly 20 percent each year until 1929.
READ MORE: Here Are Warning Signs Investors Missed Before the 1929 Crash
People Bought Stocks With Easy Credit

During the 1920s, there was a rapid growth in bank credit and easily acquired loans. People encouraged by the market's stability were unafraid of debt.

The concept of "buying on margin" allowed ordinary people with little financial acumen to borrow money from their stockbroker and put down as little as 10 percent of the share value.

A similar type of overconfidence was seen in industries such as manufacturing and agriculture: overproduction led to a glut of items including farm crops, steel, durable goods and iron. This meant companies had to purge their supplies at a loss, and share prices suffered.

The Government Raised Interest Rates

In August 1929 - just weeks before the stock market crashed - the Federal Reserve Bank of New York raised the interest rate from 5 percent to 6 percent.

Some experts say this steep, sudden hike cooled investor enthusiasm, which affected market stability and sharply reduced economic growth.

Bettmann Archive/Getty Images

Another factor was an ongoing agricultural recession: Farmers struggled to make an annual profit to keep their businesses afloat. Some believe this agricultural slump affected the financial climate of the country.

Panic Made the Situation Worse

Public panic in the days after the stock market crash led to hordes of people rushing to banks to withdraw their funds in a number of "bank runs," and investors were unable to withdraw their money because bank officials had invested the money in the market.

This led to massive bank failures and further deepened an already dire financial situation.

Many analysts claim that the financial press also played a key role in contributing to the sense of panic that exacerbated the stock market crash.

The day before Black Thursday, the Washington Post ran the headline: "Huge Selling Wave Creates Near-Panic as Stocks Collapse," while The New York Times announced: "Prices of Stocks Crash in Heavy Liquidation."

There Was No Single Cause for the Turmoil

Most economists agree that several, compounding factors led to the stock market crash of 1929.

A soaring, overheated economy that was destined to one day fall likely played a large role. Equally relevant issues, such as overpriced shares, public panic, rising bank loans, an agriculture crisis, higher interest rates and a cynical press added to the disarray.

Many investors and ordinary people lost their entire savings, while numerous banks and companies went bankrupt.

While historians sometimes debate whether the stock market crash of 1929 directly caused the Great Depression, there's no doubt that it greatly affected the American economy for many years.

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What Caused the Stock Market Crash of 1929?

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The stock market crash of 1929-considered the worst economic event in world history-began on Thursday, October 24, 1929, with skittish investors trading a record 12.9 million shares. On October 28, dubbed "Black Monday," the Dow Jones Industrial Average plunged nearly 13 percent. The market fell another 12 percent the next day, " Black Tuesday."

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Image: A ranking of the largest market crashes

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Image: A ranking of the largest market crashes

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Article: Stock Market Crashes of the last 100 years

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Article: Stock Market Crashes of the last 100 years

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In a special two part piece that will conclude next month we look back at the major stock market crashes of the past 100 years.

Since the creation of the Wall Street Stock Exchange, at the beginning of the 20th century, there have been countless stock market crashes that have ruined the fortunes of many in just a matter of days, hours, or even minutes. Crashes are the result of panic selling associated with poor underlying economic conditions. Although the exact triggers vary widely from crash to crash, most of the time a crash follows speculative stock market bubbles, periods under which people drive share prices up to lofty levels seemingly in thrall to never ending prices and where valuations get pushed way beyond fundamentals. To quote Alan Greenspan: "periods of irrational exuberance".

A stock market crash differs from a bear market due to its associated accelerated panic selling leading to abrupt and often dramatic price declines in short spaces of time. In what may surprise many, a crash need not necessarily lead to a bear market. Of course, the Wall Street Crash of 1929 lead to a prolonged bear market that took until 1935 for the market to shake off. In contrast, the crash of 1987 was shrugged off in a couple of years and in fact set the scene for the long bull market of the 1990's.

In this edition of our magazine we will take a look at the Panic of 1901, the Panic of 1907, the Wall Street Crash of 1929 and the Black Monday of 1987. In the next Spread Betting Magazine's edition we will continue with the little known Friday the 13th mini-crash of 1989, the October 27, 1929 mini-crash, the 9/11 aftermath crash of 2001, the 2008 Great Financial Crisis crash, and finally the 2010 flash crash.

'Crashes are the result of panic selling associated with poor underlying economic conditions.'

Panic of 1901

The Panic of 1901 originated from a fight to control the U.S. railroads between E.H. Harriman and James J. Hill. Harriman was in control of Union Pacific while Hill was in control of Northern Pacific Railway. To dominate the rail roads of Chicago, Burlington and Quincy, Harriman tried to gain control of Northern Pacific Railway by quietly buying up its shares. Just when he almost achieved his goal, Hill learned of Harriman's activities and contacted J.P. Morgan who ordered his men to buy every share that they could get their hands on. As a result, Northern Pacific shares rose exponentially and the short sellers faced ruin, having to buy to cover at much inflated prices. In the end, neither Hill nor Harriman were able to accomplish their respective goals and in the end they decided to form a trust - Northern Securities - a company that was prosecuted and convicted under antitrust laws, and finally dissolved in 1904. As a direct consequence of the fight between these two stubborn men, many fortunes of lesser men were ruined in the panic that ensued in the stock market in the wake of the prosecution.

Panic of 1907 (also known as the 1907 Banker's Panic)

In October 1907, a financial crisis occurred as a consequence of a failed attempt to corner the market of United Copper Company. The failed attempt led to a major failure in the banking system, a run on banks and almost a collapse of the whole banking system (sound familiar?!). The crisis has a name - the Otto Heinze Crisis - a man whose failed attempt to push a single tock price higher almost left the country's banking system facing bankruptcy. In what was arguably the era of Mr J.P. Morgan - a name that still bestrides global markets today - this venerable banker's actions allowed the market to avoid meltdown.

Otto Heinze implemented a scheme to drive the price of United Copper Corporation artificially higher. He planned to buy shares and put the short sellers in a situation where they had no other chance as to cover their losses apart from repurchasing shares at a much higher price (such events seem entirely legal today as the hedge funds who shorted Volkswagen shares in recent years found to their cost!).

Heinze's plan was almost farcically flawed, however, as he lacked one major lynchpin to the plan: he didn't have the necessary funds to do it! Still, undeterred by this small issue, Heinze decided to go ahead with his plan. He overestimated how much of the company his own family controlled and although he succeeded in part in driving the price up, the short sellers were able to get the necessary shares from other sources instead of the Heinze's family and so the corner operation failed.

As a result of the failure, the price of United Copper shares dropped substantially and Heinze was in a difficult situation unable to pay his debts. Banks lending money to the scheme suffered runs which spread to other banks and trusts. The third largest trust of New York City - Knickerbocker, capitulated, as people withdrew money from almost every bank and trust. J.P. Morgan's intervention was crucial. He lent money to banks and convinced other influential people to do the same in an attempt to restore confidence. The effort was magnanimous and he was able to put an end to the liquidity crisis in November 1907. United Copper Company was ruined and never recovered however.

The Stock Market plunged 50% from its peak one year earlier.

The panic occurred during a recession and the negative effects were substantial. Production dropped 11%, the stock market plunged 50% from its peak one year earlier, the unemployment rate rose from 3% to 8% and imports dropped 26% - all because of one man's greed (again, ring any bells Mr Fred Goodwin?!). Fortunately, positivity came from the crisis. In the aftermath it became obvious something should be done to avoid future runs on the banking system. A commission was created and from its recommendations the Federal Reserve System was borne later in 1913.

The Great Wall Street Crash of 1929

The Wall Street Crash of 1929, also known as Great Crash or simply Stock Market Crash of 1929, is the Grand-daddy of them all. Quite simply the biggest and most far reaching shakeout in stock market history. In 1987, the stock market experienced a larger drop in a single day but the 1929 crash was much more profound and marked the beginning of an economic downturn that was the worst in America history - The Great Depression.

Right throughout the 20's, markets had been rising for nine consecutive years. The U.S. economy was emanating confidence as its power and influence was rising on the global stage. Many Americans invested in the stock market with more and more getting sucked on as prices seemed to spiral perpetually higher. People borrowed money and brokers were happy to allow buying on margin (an early precursor to CFD trading and spread betting perhaps?).

In the days preceding October 24, 1929, shares prices suddenly became unstable however. With the P/E ratio on the S&P index sitting above 30, a bubble was already well and truly formed. At the time, however, many attributed the price swings to the prospects for passage of the Smoot-Hawley Tariff Act, an awful piece of law that imposed raising U.S. import tariffs to record levels. The exact reason that led to the sudden decline in shares on October 24 is not known, but panic hit the market and it was driven down 11% just after the open. Several influential bankers called an emergency meeting and decided to buy shares in blue chip companies in an attempt to encourage investors to do the same and so restore trust in the marketplace. It was a success and the market recovered during the session to close just a little under water.

Unfortunately, the press hit the eyes and ears of many during the weekend (recall this was a time of no computers and internet!) and on Monday October 28th, investors tried to sell their shares, many held on margin, en masse. Panic spread and the market lost 13% in what was the second largest daily loss ever at the time. The following day another loss of 12% was registered. Even though the market managed to recover 12% the following day, the damage had already been done. Confidence was shot to bits and many margined players were flushed out. A downtrend of three years was just getting started.

Stock market values dropped an incredible 90% during the ensuing 3 years through to 1932 in what was the worst depression ever - the Great Depression. In just four years, the economy saw unemployment rise from 3% to 25%, international trade halved and many people were ruined. Although many say the crash and the depression that followed were not cause-effect, truth is there is a strong relation. The plunge in the stock market hit confidence in the whole nation and led to the bankruptcy of several banks. Businesses couldn't get funds from banks and unemployment rose (ever more parallels with the events of recent times eh?). Consumption was severely hit and a process of economic torpor and contraction was put in motion that was only mitigated when President Hoover started the great American rebuilding program.

Even though it is not clear what led to the crash and the subsequent crisis, there are certain factors that were key. First of all, a lesson to learn on valuation. Never buy overvalued shares with the crowd. High P/E ratios illustrated that a bubble had formed and that sooner or later a crash would occur. Second, the Smoot-Hawley Tariff Act was quite simply ruinous. J.P. Morgan, a key man in the prior crashes, almost begged President Hoover to veto the act as he knew it would be disastrous. He was right. The Act played its role in the crash as many countries retaliated against the crazy import tariffs. In 1933, U.S. international trade was an astonishing 50% lower than where it was at the start of 1929. Third, the fallout from the banks de-leveraging only served to accelerate the problem. A system to diminish the effects deriving from liquidity problems should have been in place, but it wasn't. Amazingly, it took 25 years until 1954 for the Dow to recover its pre-1929 crisis level.

Black Monday of 1987

'It was the worst single-day drop the Dow ever experienced and to this day still stands losing 508 points which translates into a tub thumping 22.61% drop'

The crash occurred on October 19, 1987 becoming later known as Black Monday. It was the worst single-day drop the Dow ever experienced and to this day still stands, losing 508 points which translates into a tub thumping 22.61% drop. Prior to this single-day loss, there was a warning shot across the bows to investors as the Dow had lost 10% over the prior three sessions. It took almost two years for the index to fully recover from the loss. But, if we contrast this with the twenty five years it took to recover from the 1929 crash, it was nothing. In fact, although being the worst single-day loss, the 1987 crash was relatively mild in terms of its aftermath problems. This time there was no J.P. Morgan to save the banks, but the Federal Reserve System was already in place and doing its job to avoid the spread of problems to the whole economy through slashing interest rates. Its actions were very effective and a painful and prolonged bear market and economic contraction was averted.

Many explanations were advanced in an attempt to explain the catalyst for the sudden break in confidence and to this day, people still debate it. Before the crash happened the Dow rose 65% in the two years that preceded it and the market had just experienced a five year bull period rising 189% since August 1982 as Treasury Bond yields fell dramatically and a "cult of equity" was again getting started. We can see now, however, that the usual ingredients were again in place - investor exuberance, lofty valuations and a prolonged bull run that had manifested complacency amongst the investing populous.

Some people think that computer trading exacerbated the decline. In 1987 computers were developing fast and were being used to automate trading. Some reports say that when the markets started falling, the computers introduced sell orders on every down tick they saw as a direct consequence of what was called "portfolio insurance" and that this amplified the drop. Still, this wasn't the catalyst. The crash started first in Hong Kong as the market opened Sunday night (UK time) and then spread to Europe and finally to the U.S. in a crescendo right around the globe.

Just ahead of the crash, US legislation was introduced that eliminated the deductibility of interest debt related to corporate takeovers. Again, many have postulated that this was the trigger, but the simple reality is participants were over extended and over exposed and that all that was needed was for a few participants to hit the sell button for the entire pack of dominos to fall. Interestingly however, the stocks that led the decline in the US were those that were the most affected by the legislation.

The final reason pointed out as the cause of the 1987 crash is related to the US' international trade deficit. A large deficit was announced on October 14 which led the Treasury Secretary to suggest the U.S. dollar may need to fall to bring the current account back into equilibrium. His statement raised fears that foreign investors could pull capital out of dollar-denominated assets, causing a rise in interest rates and a fall in asset prices.

All these reasons may have had their part in the crash, but the presence of an overvalued market is always a key determinant. A P/E ratio at the time of 20 was a warning signal. In writing this piece it caused us to look at any comparable with the present environment. Happily, we find compelling global valuations, particularly in selected Europe, the UK and Japan. All display the same characteristics of investors that are under weight and fatigued with equities and where a largely side-ways market has been experienced over the last 12 years. In short, if history is any guide, the current environment is not one that historically crashes have emanated from.

'In short, if history is any guide, the current environment is not one that historically crashes have emanated from.'

Article reproduced from the December edition of Spread Betting eMagazine

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Stock Market Crashes of the last 100 Years

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In a special two part piece that will conclude next month we look back at the major stock market crashes of the past 100 years. Since the creation of the Wall Street Stock Exchange, at the beginning of the 20th century, there have been countless stock market crashes that have ruined the fortunes of many in just a matter of days, hours, or even minutes.

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Article: Advice for after a stock market crash

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Article: Advice for after a stock market crash

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( This article is excerpted from the new book You're Already a Wealth Heiress! Now Think and Act Like One: 6 Practical Steps to Make It a Reality Now.)

Stock market crashes and pullbacks can seem frightening. But you are actually worse off in your 401(k) or your Individual Retirement Account by not investing in stocks than you are if there is a pullback or crash.
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Why? Because wealth is about investing. And to do that, you have to take risk and invest. That said, let me offer 10 suggestions on what to do and what not to do after a significant market decline:

1. Do nothing. Selling stocks after a crash is the worst thing you can do. Do not do it! Do not sell! Most of the time, the stock market will at least have a strong move upward after the crash. That is called a dead-cat bounce. So wait for the move up if you are considering selling.

My advice is to not sell even after the dead-cat bounce. It may take a few months or a few years, but the stock market has always recovered eventually and then gone higher. It likely will next time, too.

2. Do not panic. Don't call your broker and say, "Get me out! I do not care if I've lost money, just get me out!" Many inexperienced investors speak those very words right at the very bottom, before the big dead-cat bounce comes. What you have done then is locked in your losses.

3. Resist the urge to sell. Under all conditions, resist the urge to sell. You will only do yourself serious harm if you sell. Accept that pullbacks and crashes are part of stock market investing. Expect it. Embrace it. Relax and know it won't last forever, no matter what the pundits are saying and how many Chicken Littles appear on CNBC saying the world is ending.

Remember, the stock market is made up of businesses and businesses sell things to people. When you wake up tomorrow, you will still have to eat, work, drive and buy things, and so will everyone else. You may change your spending priorities depending on how well the economy is doing, but you still will spend money. Therefore, companies will still be in business tomorrow even if their stock price is a lot lower today.

4. Consider buying. Stocks are on sale. Before a pullback or crash, stocks were a lot more expensive than they are after one, so decide if you want to buy once the market drops.

Think about the products and services you spend your money on. They may be a place to start looking for potential investments. What are the trends today that will continue for years? For example, are health care companies something that could have strong sales for years to come? Perhaps they are worthy of further investment research. For instance, are they undervalued or overvalued? What is their earnings growth rate? Is it sustainable? Is it steady? What is their relative strength compared to their competitors? Are insiders buying? These are just a few things to consider before investing.

5. Consider rebalancing your portfolio. After a crash or pullback, take a look at your portfolio and see if you are positioned as well as possible. Think about what percentage you have in large-cap stocks (shares with market capitalization over $10 billion; capitalization is a company's stock price times the number of shares), mid-caps ($2 billion to $10 billion in capitalization), small caps (capitalization of under $2 billion), bonds, international stocks, emerging market stocks, real estate, precious metals and other mutual funds or Exchange-Traded Funds (ETFs).

Perhaps you have too much in large company stocks and want to add in smaller companies that are strong growers in a niche and can navigate tough waters in a recession better - like a speedboat versus a cruise ship.

6. Check your fear level. Fear does nothing for an investor but cause you to freeze. So if you are feeling fearful, start doing some research that will make you feel more empowered. Go buy an Investor's Business Daily and read it. See what experts are saying and look at the charts of the market leaders. It is an inexpensive way to do professional research.

7. Check your 401(k). Go online and check out what your 401(k) is invested in. It may hold stocks of large companies that pay dividends and those might be a good buy because you get the dividend plus stock appreciation. Together, that can provide a good return and compounding rate.

8. Get your stocks shopping list together. Think about which stocks you've wanted to own the last few years. This might be the time to buy some for a bargain price, if they are still expected to have strong sales and growth.

9. Consider investing in an ETF specializing in dividend-paying stocks. I've already mentioned why dividend-paying stocks can be a good idea. There is an ETF that invests in a minimum of 40 companies with rising dividends for the last 25 years. It is called Dividend Aristocrats. You might want to add it to your portfolio to own solid companies with good track records of paying dividends.

10. Think about buying what are known as defensive, consumer-staple-oriented companies. The person finance site Investopedia defines consumer staples as "goods that people are unable or unwilling to cut out of their budgets regardless of their financial situation." Consumer-staples stocks are considered non-cyclical, meaning they are always in demand, regardless of how the economy is faring. Think about adding defensive companies to your portfolio - things people routinely spend money on, like cigarettes, liquor, pharmaceuticals, groceries, gasoline, snacks, soft drinks, fast food and cosmetics.

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( This article is excerpted from the new book You're Already a Wealth Heiress! Now Think and Act Like One: 6 Practical Steps to Make It a Reality Now.) Stock market crashes and pullbacks can seem frightening.

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As described by the brokers

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The Stock Market Crash of 1987 | Cancel Crash

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Is the next crash coming?

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What we can learn from past stock market crashes

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Article: 25 Reasons the stock market could crash.

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Article: 25 Reasons the stock market could crash.

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October is now in the rearview mirror, much to the chagrin of investors. For the month, the iconic ( Dow Jones Industrial Average shed 5%, the broader-based S&P 500 SNPINDEX:^GSPC) dove 6.9%, and the tech-heavy Nasdaq Composite tumbled 9.2%. As a whole, it was one of the worst months for U.S. markets in years and absolutely the worst month for tech stocks in a decade.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Sean Williams has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Facebook, and Netflix. The Motley Fool has the following options: short November 2018 $155 calls on Facebook and long November 2018 $135 puts on Facebook. The Motley Fool has a disclosure policy.
Is a stock market crash on the horizon?

But here's the bigger question that retail investors and Wall Street are currently asking: Is the current stock market correction over? Given the many headwinds facing stocks and the U.S. and/or global economy, the answer may not be what investors want to hear.

In no particular order, here are 25 reasons and/or scenarios that could cause the stock market to head substantially lower than where it's currently valued.

1. The ongoing trade war with China escalates, raising material costs, curbing consumer spending, and hurting corporate profits.

2. Corporate share buybacks fail to boost per-share profits as much as expected.

3. Democrats win one or both houses of Congress, hurting the chance of Republicans to pass further fiscal stimulus legislation.

4. The federal budget deficit continues to soar, placing added emphasis on our growing national debt, currently at more than $21 trillion.

5. The U.S. dollar keeps strengthening, placing pressure on exports and worsening the U.S. trade deficit with foreign countries.

6. FANG stocks - that's Facebook, Amazon.com, Netflix, and Google (now Alphabet) -- continue to draw the ire of short-sellers.

7. The Federal Reserve gets overly aggressive with interest rate hikes, sapping lending demand.

8. The yield curve flattens, reducing the desire of banks to lend money.

9. Interest rates rise, providing incentive for investors to ditch volatile equities for the safety of bonds and bank CDs.

10. Britain falls into a "hard Brexit." With few or no trade deals in place, the U.K. falls into recession, taking the U.S. and other developed countries with it.

11. China's economy experiences its slowest growth in decades, placing pressure on its ability to import from the U.S. and other key players.

12. The U.S. housing market shows signs of weakening, with important markets like California seeing a steep drop-off in new home sales.

13. Credit-card delinquencies begin to trickle higher, demonstrating the inability of consumers to meet their payment obligations.

14. The subprime auto loan market bubble bursts.

15. The U.S. goes to war, regardless of the reason or the country in question.

16. An errant tweet from President Trump stirs Wall Street and investors.

17. A flash crash caused by computer algorithms results in substantially reduced liquidity and perpetuates a rapid move lower in the stock market.

18. Investor emotions (especially those of day traders) get out of hand and send traders running for the exit.

19. The unemployment rate, which is at a 49-year low, begins to rise, signaling peak employment and the possibility of a weakening economy.

20. Disruption in important oil-producing countries causes crude prices to skyrocket or plunge. Either way, it could create sticker shock or job losses and adversely impact the U.S. economy.

21. U.S. GDP data shows slowing growth, which, in turn, cools investor expectations for stocks, sending them lower.

22. Inflation comes in far lower than expected, signaling that businesses have little pricing power. The prospect of deflation could wreak havoc on corporate earnings, causing the market to fall.

23. The U.S. debt ceiling is hit (yet again), but the political divide in Congress becomes too great for lawmakers to overcome, allowing the shutdown to perpetuate for months.

24. European debt crisis 2.0 hits, with countries like Italy unable to dig their way out of years of loose borrowing.

25. A widely followed pundit, such as Warren Buffett, sounds the cry of the stock market being overvalued.

In other words, there is no shortage of reasons the stock market could tumble from its recent all-time highs. But it's also important that investors recognize the market's three constants.

Three stock market constants you need to know

The first of those three constants is the reality that we're never going to know ahead of time when a correction will occur, how long it'll last, how steep it'll be in terms of percentage decline, or, ultimately, what causes it in the first place.

Above, I've listed 25 seemingly logical reasons that the stock market could crash. Each of them is reasonable in its own context. And yet there's a decent chance that the next stock market correction or crash will arise because of a reason not listed above. Call it the stock market's "X-factor." Whatever it is, corrections usually take the market by storm, and they're rarely ever forecast in advance with any long-term accuracy.

Second, it's important for investors to understand that while we can't know in advance how long a correction will last, data shows that they tend to be quick more often than not. Of the 36 stock market corrections since 1950 in the S&P 500 (not counting our newest correction), 22 have found their bottom in 104 or fewer days. Since 1982, just four corrections have lasted longer. Put plainly, even though corrections are unpleasant from a paper-loss perspective, they're a normal part of the market cycle and rarely last that long.

Third, and perhaps most important, investors are batting 1.000 over the long run. Despite 36 corrections in the S&P 500 over the past 68 years, each and every previous decline has been erased by a bull-market rally. This demonstrates that the most important variables to success in investing are patience and time. If history holds true, this correction will also be erased by a bull-market rally at some point in the future.

In other words, stop worrying so much about short-term volatility and "what ifs" and start thinking about what great companies you can scoop up that'll deliver for you over the long run.

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25 Reasons the Stock Market Could Crash, and 3 (More Important) Constants -- The Motley Fool

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October is now in the rearview mirror, much to the chagrin of investors. For the month, the iconic ( Dow Jones Industrial Average shed 5%, the broader-based S&P 500 SNPINDEX:^GSPC) dove 6.9%, and the tech-heavy Nasdaq Composite tumbled 9.2%. As a whole, it was one of the worst months for U.S.