by Tim Smith
During the roaring 1920s, it seemed you couldn’t go wrong with stocks.
Years of rising stock prices created the mindset that there was never a reason to sell. Investors flocked to stocks, believing they could only go up. So, when the stock market started to crash in 1929, most investors thought it was just another great buying opportunity.
Frederick Allen described the investment environment in his book, “Only Yesterday: An Informal History of the 1920s”:
“As people in the summer of 1929 looked back for precedents, they were comforted by the recollection that every crash of the past few years had been followed by a recovery, and that every recovery had ultimately brought prices to a new high point.