Melt Up

AAA

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.



RELATED TERMS
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave ...
  2. Fundamentals

    The qualitative and quantitative information that contributes ...
  3. Fundamental Analysis

    A method of evaluating a security that entails attempting to ...
  4. Intrinsic Value

    1. The actual value of a company or an asset based on an underlying ...
  5. Panic Selling

    Wide-scale selling of an investment, causing a sharp decline ...
  6. Bid Wanted

    An announcement by an investor who holds a security that he or ...
RELATED FAQS
  1. When do stock market exchanges close?

    Closing times for stock market exchanges vary, but they generally close in the evening except on holidays. A stock market ... Read Full Answer >>
  2. What are some examples of different taxable events?

    A taxable event is any event or occurrence that results in a tax liability. All investors or parties that pay taxes experience ... Read Full Answer >>
  3. Why is the time value of money (TVM) an important concept to investors?

    The time value of money (TVM) is an important concept to investors because a dollar on hand today is worth more than a dollar ... Read Full Answer >>
  4. What commodities are not tradable?

    As of February 2015, commodities that are not tradable include diamonds, tomatoes, carbon dioxide, lemons, eggs, potatoes, ... Read Full Answer >>
  5. How do I use Positive Volume Index (PVI) for creating a forex trading strategy?

    The positive volume index (PVI), is a momentum indicator that measures the degree to which price changes on days when volume ... Read Full Answer >>
  6. How can I use alpha in conjunction with the Treynor Ratio?

    Alpha and the Treynor ratio are two technical indicators widely used in risk management to assess the effectiveness of investment ... Read Full Answer >>
Related Articles
  1. Retirement

    Money Market Mayhem: The Reserve Fund Meltdown

    This event serves as a stark reminder to investors about understanding their portfolios.
  2. Budgeting

    Five Strategies For Surviving Tough Times

    Cruise through a slowing economy - even when others are going off the rails.
  3. Personal Finance

    The Fuel That Fed The Subprime Meltdown

    Take a look at the factors that caused this market to flare up and burn out.
  4. Economics

    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.
  5. Investing

    Understanding Smart Beta Sources of Returns

    In part 2, BlackRock explains how Smart Beta beats other active investment strategies.
  6. Investing

    Smart Beta in Portfolios

    In part 3, BlackRock explains how Smart Beta is a powerful tool for investors.
  7. Investing

    Disadvantages Of Stock Simulators

    Stock simulators enable one to practice trading, but they have some disadvantages that you should be aware of, before transitioning to actual trading.
  8. Investing

    Crowdfunding: Wide Opening For Tech Investors

    Crowdfunding has dramatically changed investing and opened the door for the public to get in on all types of exciting startups, including tech firms.
  9. Professionals

    Ready For The Entrepreneurial Leap?

    There are key traits and motivations that characterize an entrepreneur; these aren't necessarily genetic, but can be acquired over time.
  10. Investing Basics

    Here's How To Tap International Markets

    Access to foreign markets has grown a lot in recent years, allowing US market players to trade these bourses in real-time.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center