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Is the stock market in a bubble? What investors need to know

Frothy markets in the US do not necessarily spell a crisis

By Paul Wallace   April 2021

Image: Klaus Ohlenschlaeger / Alamy Stock Photo

Starting with the Dutch tulip mania of the 1630s, bubbles have been a perennial feature of financial history. More recent examples are the dotcom craziness of the late 1990s and the house price booms ahead of the financial crisis of 2008. As stock markets prematurely raise their glasses to a happy ending to the pandemic, the question arises: are we in another bubble now? 

If so, it is not for lack of worrying. The year started with a record number of Google searches for “stock market bubble,” as US investors ganged up on social media to fight hedge…

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