A bubble is an economic cycle characterized by rapid expansion followed by a contraction.
 | | Bubble | | A bubble is an economic cycle characterized by the rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive sell-off occurs, causing the bubble to deflate. | | Breaking it Down: | | Bubbles form in economies, securities, stock markets and business sectors because of a change in... | | Read More » | | Bubble Theory | | Bubble theory is an economic hypothesis that irrational investors generate precipitous rises in asset prices, leading to overvaluation. | | Read More » | | | Dotcom Bubble | | The dotcom bubble was a rapid rise in U.S. equity valuations fueled by investments in internet-based companies during the bull market in the late 1990s. | | Read More » | | | Irrational Exuberance | | Irrational exuberance refers to investor enthusiasm that drives asset prices up to levels that aren't supported by fundamentals. | | Read More » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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