Bubble

When speaking of the stock market, “bubble” refers to a state when the price of a certain asset class or commodity moves to an unsustainable level. Bubbles form across the board—they can form in stocks, commodities, fixed-income securities, different industries, and more. They are usually followed by prices falling into a freefall. There have been many bubbles in the past, and they continue to occur. Some stock market bubbles we’ve seen in the past include: the South Sea Bubble, Tulip Mania, the Dotcom Boom, the Japanese economy in the 1990s, and the recent U.S. housing market bubble.