5 Steps Of A Bubble

AAA

The term "bubble," in the financial context, generally refers to a situation in which the price of an asset exceeds its fundamental value by a large margin. During a bubble, prices for a financial asset or asset class are highly inflated, bearing little relation to the intrinsic value of the asset. The terms "asset price bubble," "financial bubble" or "speculative bubble" are interchangeable, and are often shortened simply to "bubble."
  1. No results found.
Related Articles
  1. Insights

    5 Steps of a Bubble

    In the financial sense, a bubble refers to a situation where the price of an asset far exceeds its fundamental value.
  2. Investing

    How Does a Bubble Form and Burst?

    A bubble forms when prices grow beyond their true value.
  3. Insights

    5 Steps Of A Bubble

    Bubbles are deceptive and unpredictable, but by studying their history we can prepare to our best ability.
  4. Insights

    5 Ways To Spot The Next Stock Bubble - And Avoid It

    Playing a market bubble could pay off, but it carries a lot of risk. Avoiding it could be the way to stay profitable.
  5. Insights

    How Do Asset Bubbles Cause Recessions?

    Understand how asset bubbles often lead to deep, protracted recessions. Read about historical examples of recessions preceded by asset bubbles.
  6. Insights

    The Myth About Market Bubbles

    Bubbles have made and ruined fortunes. Though they can be difficult to predict, understanding how they work gives you a visible advantage.
  7. Investing

    Avoid The Bubble And Protect Your Portfolio

    As the S&P 500 delivered a 19.7% annualized gain over the past six years, talk of a market bubble has emerged. Concerns of a bubble in prices are not just being voiced by perma-bears like Nouriel ...
  8. Insights

    4 Reasons Why Irrational Exuberance Lasts Awhile

    Discover four reasons why markets sometimes exhibit irrational exuberance and form asset bubbles and why those bubbles are so pernicious.
  9. Insights

    Economic Meltdowns: Let Them Burn Or Stamp Them Out?

    Whether the Fed should intervene in market bubbles is up for debate. Learn about both sides here.
  10. Insights

    What's The Next Bubble?

    While these bubbles have held up fairly well so far, what happens if poor economic conditions continue or get even worse?
Hot Definitions
  1. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  2. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  5. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  6. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
Trading Center