You can usually predict, well before the event, that a stock market crash is going to happen. There are certain events which happen prior to the crash, and which lead up to it. To begin with the market is quite weak, a situation which is known as a bear market. When this happens many people are eager to invest in shares, believing that the value of those shares is bound to rise and therefore make them a good profit. This interest in the market does indeed cause the share values to rise, and the market becomes a bull market, in other words an especially strong one. Mutual funds are an especially popular type of investment at this point in the investment cycle. The market is quite stable at this stage, and there are good profits to be had from investment in this early part of the cycle.  fiat currency 3;More investors join in at this stable part of the investment cycle, as investors are encouraged to buy and to increase their profit in the stock market. Companies release stocks onto the market during the bull market phase, and it is common for IPOs or Initial Public Offerings to be available in this period before a stock market crash. Companies do very well out of this situation, with the value of their stocks rising steeply, and great confidence from investors in the value of their stocks. More and more money is being invested by people who want to be the first to buy stocks in a particular company. Those investors who bought shares in the beginning phase of the cycle are now keen to sell them, before they lose their money, knowing that the value of their shares will soon go down.
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