People did not have the money on hand to invest in stocks, so they took out their savings and bought on margin, which means getting a loan to buy stocks (Investopedia). This time period, known as the Roaring Twenties, saw the United States’ wealth double due to the proliferation of investors (History Staff). However, the general population had no idea how the market really worked. The people of Wall Street took advantage of their ignorance and controlled the market in their favor in order to gain more profit by using illegal practices, like insider trading (Investopedia). The market soon became overbought and overvalued. Unexpectedly, on October 24, 1929 (Black Thursday), the stock market dropped (Investopedia). Lenders called in their loans, which the borrowers had to somehow pay (Amadeo). Unfortunately, to pay off their debt some had to sell their houses and liquidate their savings. Though, the
People did not have the money on hand to invest in stocks, so they took out their savings and bought on margin, which means getting a loan to buy stocks (Investopedia). This time period, known as the Roaring Twenties, saw the United States’ wealth double due to the proliferation of investors (History Staff). However, the general population had no idea how the market really worked. The people of Wall Street took advantage of their ignorance and controlled the market in their favor in order to gain more profit by using illegal practices, like insider trading (Investopedia). The market soon became overbought and overvalued. Unexpectedly, on October 24, 1929 (Black Thursday), the stock market dropped (Investopedia). Lenders called in their loans, which the borrowers had to somehow pay (Amadeo). Unfortunately, to pay off their debt some had to sell their houses and liquidate their savings. Though, the