Great Bull Market of 1924-29 was accompanied by phenomenal rise in stock prices. In this period, extreme optimism and high speculation on the part of the investors helped some common stocks to generate extremely high levels of profit. But, this Great Bull Market of 1924-29 was followed by a stock market breakdown.
Great Bull Market of 1924-29 took place as a result of the speculative bubble, according to some experts. After the Great Bull Market of 1924-29, prices of the stocks fell drastically and if we go by the view of speculative bubble, then we have to admit that the this fall was inevitable, by bursting of the speculative bubble.
Great Bull Market of 1924-29 started in the second quarter of the year 1924 and continued to exist for 21 quarters. The bullish market condition reached its’ peak in the third quarter. The bull market of 1924-29, was the result of high levels of profit, generated by some leading stocks.
The phenomenal growth in stock prices, created a widespread optimism among the investors. In fact, in some places, the optimism increased to such an extent that people started to think that this stock market prosperity is permanent and has the power to pull out the economic crises.
But, this optimism created a negative impact and contributed to the next stock market collapse. A stock market crash took place after the Great Bull Market of 1924-29. The reason behind this stock market crash was that, following the bull market period; speculation about the stock prices went so high, that the stock market actually became overpriced. Unjustifiably high prices of shares also contributed to the stock market breakdown of 1929. Moreover the problem of mismanagement and violation of finance principles also aggravated the situation and the stock market crash occurred.
As in the time of Great Bull Market, the expectations of the investors rose high, in following period of stock market breakdown, investors fear in investing went up to the extreme level. But, it can be mentioned here, that in the history of bull market and bear market, it has been observed that, high prosperity and boom period of stock market is always followed by a financial crisis. Bullish market condition cannot survive for eternal period; every stock market is bound to start moving downwards at some point of time or other.