What is a stock market bubble?

Answer by  adam84 (58)

A stock market bubble is when stock prices surge and get irrationally high. But these prices do not reflect the underlying worthiness of the stock. This means that the stock prices are extremely overvalued. Then the prices crash, going way down. A good example is the internet bubble of 2000-2001.

Answer by  canadabee (932)

A stock market bubble refers to a phenomenon where an entire stock index (ex. the Dow Jones Industrial index or the Nasdaq) becomes inflated so that the the combined value of all its stocks is higher than the real value of the assets represented by those stocks. The bursting of such a bubble is inevitable and will cause stock decreases.