Written by John O’Donnell, Online Trading Academy
Chart of the Week 20 June 2016
Historically stock markets have grown at about the same rate as the economy has grown. But in the past 20 years stock prices have deviated to the upside from GDP growth three times. After peaking in 2000 and 2007 the value of stocks returned to the trendline plotted as GDP. Now there is a third and even bigger bubble. Well it’s not proven to be a bubble yet – prices must return to the vicinity of the GDP trendline to confirm the bubble. Why that confirmation is likely will be discussed this week.
Stock market bubbles are discussed in video after the Read more >> jump.
Source: YouTube
