Market Review and Trends
Are We In A Bubble?
By Early Retirement SG  •  July 24, 2020
I'll copy and paste large chunks from Investopedia. https://www.investopedia.com/terms/i/irrationalexuberance.asp
KEY TAKEAWAYS Irrational exuberance is unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors. The term was popularized by former Fed chairman Alan Greenspan in a 1996 speech addressing the burgeoning internet bubble in the stock market. Irrational exuberance has become synonymous with the creation of inflated asset prices associated with bubbles, which ultimately pop and can lead to market panic. Breaking down Irrational Exuberance Irrational exuberance is widespread and undue economic optimism. When investors start believing that the rise in prices in the recent past predicts the future, they are acting as if there is no uncertainty in the market, causing a positive feedback loop of ever-higher prices.​We can tell ourselves anything... There's more liquidity in the market, COVID will be gone soon, the market is forward looking, things aren't as bad as they seem... the list can go on..
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By Early Retirement SG
Male, born in 1982. Graduated with a degree majoring in Banking & Finance, Financial Adviser for a period of time resulting in in-depth knowledge of insurance products and marketing techniques of the industry ...
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