Unsustainable stock price zones occur when stock prices rise significantly above their intrinsic value, often due to speculative bubbles. These bubbles are fueled by factors such as excessive liquidity, investor psychology, and market sentiment, leading to rapid price increases that are not supported by fundamentals[2][3]. When the bubble bursts, it can result in sharp declines in stock prices, causing economic disruptions and recessions[1][2]. Historical examples include the 1920s stock market bubble and the dot-com bubble of the late 1990s[2][3]. Recognizing these unsustainable zones is crucial for investors to avoid significant financial losses.
Sources
[1] The worst stock market crashes of all time - IG https://www.ig.com/en/trading-strategies/the-worst-stock-market-crashes-of-all-time-181031
[2] How Do Asset Bubbles Cause Recessions? - Investopedia https://www.investopedia.com/articles/investing/082515/how-do-asset-bubbles-cause-recessions.asp
[3] 5 Stages of a Bubble - Investopedia https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp
[4] 15 Factors that Affect Stock Market Prices - Strike.money https://www.strike.money/stock-market/price-factors
[5] Stock Market Crash: Causes, History, and How to Protect Your ... https://www.businessinsider.com/personal-finance/investing/biggest-stock-market-crashes-in-history
[6] Biggest Stock Market Crashes In US History - Bankrate https://www.bankrate.com/investing/biggest-stock-market-crashes-in-us-history/
[7] [PDF] Stock Market Concentration - Morgan Stanley https://www.morganstanley.com/im/publication/insights/articles/article_stockmarketconcentration.pdf
[8] Understanding stock market volatility and how it could help you https://www.fidelity.com.sg/beginners/your-guide-to-stock-investing/understanding-stock-market-volatility
No comments:
Post a Comment