8 Reasons Why the 1929 Stock Market Crash Won’t Happen Again

8 min readJul 21, 2022

Every time the economy goes on a downward spiral, many people refer to the 1929 stock market crash, which is considered to be the worst economic event in modern history.

It’s often used as an example of how bad things could get. After the stock market crash, the US and European economies went into depression. Up to 25% of the US population was out of a job.

The stock market was also obliterated. At a peak of 381 points on September 3, 1929, the Dow Jones Industrial Average crashed to 198 in less than 2 months. It would take another 20 years before the Dow would surpass the 200-point level.

But will we experience something so draconian again?

That’s something experts like to predict. Headlines like, “Why The 1929 Stock Market Crash Could Happen Again” are always popular during a stock market crash.

As an investor and student of financial history, my answer is this: No, we will not see another 1930s-style crash and depression.

Here are 8 reasons why. At the end of this article, I’m confident you will agree with me.

1. Pre-modern stock markets were casinos

While there are a lot of speculators in global markets, there are also many long-term investors.

Before the 1930s, long-term investing wasn’t a thing. This is something new investors find hard to believe because the idea of investing is so sold that you would assume people always invested.

From the 17th century to the 1920s, investing as a means to build long-term, sustainable wealth was not in the realm of possibilities. Markets were too unstable.

It wasn’t until 1924 that economist Edgar Lawrence Smith applied a fundamental look at the long-term returns of stocks. In his book, Common Stocks as Long Term Investments, he challenged the conventional idea that stocks were merely mediums of speculation.

He was one of the first people who popularized stocks as investments. Benjamin Graham and David Dodd built on that work in their 1934 book, Security Analysis, which became the bible of long-term investing in stocks.