why did the stock market crash in 1987?

[xredfalconx512]

and why did it all happen in one day?

[popowich]

Check the Black Monday (http://en.wikipedia.org/wiki/Black_Monday_%281987%29) wiki for a starting place in information.

-Raymond

[BigWaveStudent]

Because it was greatly overvalued and the economy was failing. It all happened in one day because people were too ignorant to the facts and kept pumping money into stocks until someone finally realized it and mass hysteria set in.

[Little Man]

um...because everyone sold everything on that day...

[jason25000]

I am fairly new to investing and wasn't in the market back in '87 to experience it financially. Here's my take. There are some theories around as far as why it crashed but to pinpoint and exact reason would be difficult. The fact of the matter is that if a person knew why it crashed back in '87 they would be able to effectively "time" the market. No one has figured out how to do that just yet. From my limited experience, bull markets end badly (crash; plummet; etc)-I started out back in 1995. I hope others can give you a better answer than I-as that is one question I would love to conclusively know the answer to.

[harryn55]

The market crashed in 87 mostly because too much liquidity had been taken out by the Fed. Of course Allen Greenspan was praised for putting liquidity back in after the crash, but who’s counting.