Market bubbles

A market bubble occurs when the prices of assets like stocks, real estate, or commodities rise rapidly and beyond their intrinsic value, driven by investor enthusiasm and speculative behavior. As more people buy in, prices inflate further, creating a feedback loop. Eventually, when confidence wanes or new information emerges, prices can suddenly drop, causing a sharp decline or crash. Bubbles are often fueled by greed, over-optimism, and hype, and their bursting can lead to financial losses and economic instability. They highlight the importance of fundamental analysis and cautious investing.