Industries Prone To Bubbles And Why

Photo: Rev Dan Catt

A bubble (sometimes called an asset bubble, financial bubble or investment bubble) exists when the market prices of assets in a particular class far exceed those assets' true value. These inflated values are unstable and eventually fall dramatically.

Dozens of bubbles have inflated and burst over the course of history. While some bubbles appear to be one-time events, certain industries have seen bubbles form repeatedly, with investors seemingly never learning from past mistakes. Take a look at a few of these industries and what appears to make them bubble-prone in my Financial Edge article for Investopedia, Industries Prone to Bubbles and Why.