Three Major Market Valuation Crashes: Learning from History
Overvaluation is a persistent issue in financial markets, often triggered by speculative optimism or macroeconomic shifts. This article examines three historic valuation peaks and draws vital lessons for today’s investors. The Dot-Com Bubble saw the NASDAQ surge 400% fueled by internet euphoria, only to crash by 78% later. The Housing Bubble, marked by unsustainable prices and a financial crisis, highlighted the dangers of excessive debt. Finally, the post-COVID tech boom illustrated the impact of monetary policy on valuations. Each episode stresses the necessity of sound fundamentals and diversification for navigating present and future market risks.
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