When it comes investing, very few of us think about “defense” as much as we think about the “offense”. It’s easy to want to put money into something when the value of it goes up and up, but we never think about how it could come back down (and fast!). Sound familiar? Anyone with a mortgage knows this scenario all too well.
So as the major indexes begin to perk up, it’s natural to wonder:
• What will the next big economic bubble will be?
More importantly, how can I avoid the next big bubble and not become a victim? There are a lot of interesting theories and opinions out there. The following are a few recent ones I’ve collected.
is a book about economic “bubbles”. In short, a bubble is when the price of something grows out of control beyond its true value. Eventually, the erratic price becomes unsustainable, and the bubble “pops” meaning that it rapidly drops in price. Bubbles are nothing new; they can be found all throughout history. Some examples of recent, prominent economic bubbles include the “dot.com” bubble and the “housing market” bubble which many of us are still suffering.
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