Melt Up

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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.

INVESTOPEDIA EXPLAINS '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.



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