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Definition of 'Boom'
A period of time during which sales of a product or business activity increases very rapidly. In the stock market, booms are associated with bull markets, whereas busts are associated with bear markets. The cyclical nature of the market and the economy in general suggests that every strong economic growth bull market in history has been followed by a sluggish low growth bear market.
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Investopedia explains 'Boom'
Stocks that suddenly become very popular and gain strong elevated market profits are the result of a stock boom. An example of this is the internet technologies boom or "dot-com bubble" that occurred during the late '90s. This was one of the most famous booms in stock market history. As often occurs in a boom-and-bust cycle, this boom was followed by one of the biggest busts in history. This occurs because the growth that takes place in a boom is rarely maintained and backed up by actual company profits.
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You need to understand the various phases of the market cycle to avoid bubbles and make the best investments.
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Political moves meant prevent unemployment served to do the opposite, creating one of the worst fiscal disasters of the century.
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This strategy can be profitable but only if you know when to dump these stocks.
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Understanding the business cycle and your own investment style can help you cope with an economic decline.
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From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.
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Real estate land speculation is a way to get in on a hot investment before a boom hits.
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