Why did so many people invest in the stock market in the 1920s?

Question

surryyy · Answer

In large part so many invested so heavily because they didn't understand the market and thought it would keep going up, they thought literally that the sky was the limit and it would just keep making them big money without ever coming down. Many people just saw the stock market as an easy way to make guaranteed money because they didn't understand the cycles it goes through. 

It was also very easy to get money to invest in the market by buying stocks on margin which was basically buying with only a fraction of the money upfront. They never thought the stocks would drop below the amount still owed on them and for that reason the balloon payment (having to pay the balance all at once) wasn't something they worried about.