Asset bubbles and where to find them

Vanguard
By April 1, 2021 10:47

Asset bubbles and where to find them

Asset bubbles and where to find them

There’s only one sure way to identify an asset bubble, and that’s after the bubble has burst. Until then, a fast-appreciating asset may seem overvalued, only for its price to keep rising. Anyone who has tried to breathe one last breath into a balloon and finds it can accommodate two or three more breaths can relate. Yale University’s William Goetzmann learned just how hard it can be to pinpoint a bubble. He found that assets whose prices more than double over one to three years are twice as likely to double again in the same time frame as they are to lose more than half their value.

Vanguard
By April 1, 2021 10:47

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