Melt Up

DEFINITION of 'Melt Up'

A dramatic and unexpected improvement in the investment performance of an asset class driven partly by a stampede of investors who don't want to miss out on its rise rather than by fundamental improvements in the economy. Gains created by a melt up are considered an unreliable indication of the direction the market is ultimately headed, and melt ups often precede melt downs.

BREAKING DOWN 'Melt Up'

Financial analysts saw the run-up in the stock market in early 2010 as a possible melt up because unemployment rates continued to be high, both residential and commercial real estate values continued to suffer and retail investors continued to take money out of stocks.



RELATED TERMS
  1. Denomination

    A classification for the stated or face value of financial instruments, ...
  2. Debasement

    1. To lower the value, quality or status of something or someone.2. ...
  3. Seigniorage

    The difference between the value of money and the cost to produce ...
  4. 3D Printing

    The creation of a 3-D object through an additive printing process, ...
  5. Asset Class

    A group of securities that exhibit similar characteristics, behave ...
  6. Iridium

    One of the transition metals on the periodic table. Iridium appears ...
Related Articles
  1. Investing

    How Profits Will Be Made As The Globe Heats Up (MON, RDS-A)

    Climate change will harm earth and its inhabitants in various ways, but certain industries will see increased profits as a result.
  2. Managing Wealth

    2016's Most Promising Asset Classes

    Find out which asset classes are considered to be the most promising for generating portfolio returns and reducing volatility in 2016.
  3. Markets

    What is an Asset Class?

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations.
  4. Markets

    Is the U.S. Economy Really Improving?

    The U.S. economy might be improving for some, but not for the majority. Here's why.
  5. Managing Wealth

    Diversification: It's All About (Asset) Class

    Frustrated stock pickers rejoice - asset class selection is simpler and safer.
  6. Investing

    Value Investing: How Stocks Become Undervalued

    If you don't believe in the efficient market hypothesis, you can find a number of reasons why stocks might be trading below their intrinsic value. Many of these factors interact with one another ...
  7. Investing

    Value Investing: Common Alternatives To Value Investing

    There are dramatic differences in the ways different types of investors make their investment decisions. In this section, we'll look at some of the most common investment philosophies and see ...
  8. Trading

    Debit Spreads: A Portfolio Loss Protection Plan

    There are ways to control risks, reduce losses and increase the likelihood of success in your portfolio. Find out how spreads can help.
  9. Trading

    What Are A Stock's "Fundamentals"?

    The investing world loves to talk about fundamentals, but do you know what it means?
  10. Managing Wealth

    The Big Chill: What’s Wrong With The U.S. Consumer

    Based on the most recent April data, investors may, once again, be disappointed when the second-quarter gross domestic product (GDP) report comes in.
RELATED FAQS
  1. Which asset classes are the most risky?

    Understand why equities and real estate are the two riskiest asset classes, though they also provide the greatest potential ... Read Answer >>
  2. How does a bull market affect the economy?

    Find out why it can be difficult to prove any real causal link between rising stock market prices and a healthy, growing ... Read Answer >>
  3. What are the differences between investing in real estate and stocks?

    Invest in real estate by purchasing physical property or buildings, or invest in stocks by buying a claim to a company and ... Read Answer >>
  4. Why can real estate be a good addition to a traditional stock and bond portfolio?

    Discover why real estate can be a good addition to a traditional stock and bond portfolio. Real estate is affected by economic ... Read Answer >>
  5. What average annual return is typical for a long term investment in the real estate ...

    Learn what the average annual return on real estate investments has been over the past 20 years and how it compares to the ... Read Answer >>
  6. What is the difference between Class A shares and other common shares of company's ...

    Discover how a company can break down its common stock into multiple classes and how these classes differ from one another ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center