Stock Market Crashes: Why Markets Sell Off & How to Survive

Find out what causes markets to decline, how much they fall and how fast they recover, and how you can profit from a sell off.

Photo by Jamie Street on Unsplash

For some investors, stock market crashes are like the bogeyman…

They’re terrified the monster is always lurking just around the corner.

Let’s shine a light on the stock market crash “bogeyman” and take a good look at him.

What is a Stock Market Crash?

First of all, let’s step back and understand what exactly constitutes a stock market crash and what doesn’t.

Some investors are quick to call any market decline a “market crash,” which isn’t accurate.

There are actually three different levels of market decline, as shown in this table from AE Wealth Management.

All of these declines are measured from the market’s recent high to its lowest low:

• Pullback / Dip: A market “pullback” or “dip” is a short-term downturn after a broad longer-term uptrend. In a…