Crackle & Pop! – Why do investment markets have bubbles?

Financial Autonomy - Crackle & Pop! – Why do investment markets have bubbles?
Financial Autonomy - Crackle & Pop! – Why do investment markets have bubbles?

If you’ve ever seen a graph of any share market, you will know that whilst over the long term it tends to go up, the graph isn’t a straight line. Markets will go up, up, up over several years, only to fall back for a year or two, before re-starting their upward climb.
Research on United States investors shows that whilst over 20 years to the end of 2017, the S&P500 share market index returned 7.2%, the average investor experienced a return of 5.29% per year. I don’t imagine Australian investors would be much different.
This under-performance of investors has been observed for many years, so what’s going on? And how does it relate to market bubbles?

Resources & Links

General Advice Warning

Back to All Podcasts