Why are shares crashing? Quite simply because at this time they are a terrible investment. The price of shares have been far too high based on current earnings; we have been living through a major asset bubble funded by debt driven to a great extent by a housing bubble. That's why shares have been on a long term decline since October 2007. They are crashing at this time because people have suddenly woken up to the truth that they will lose money if they stay in shares. This causes fear, and when people are frightened, they take urgent steps. Hence the crash.
How far will they crash? My earlier targets had been FTSE 3500 and DJIA 6500 but they could go lower.
Should you hang on to your shares right now? No, sell for whatever you can get for them but all this is at your own risk, of course. As soon as the funds are with your broker, get them AWAY FROM THE BROKER. Do NOT leave money in a client account. Depending on the sums, spread around banks to maximise guarantees but make sure you have a couple of months cash in a biscuit tin AT ALL TIMES from now on. Consider gold (another post to follow). I have published briefing notes for gold purchases available at www.3r.co.uk/gold
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