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A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation. Behavioral finance theory attributes stock market bubbles to cognitive biases that lead to groupthink and herd behavior .
Equity heuristic, also referred to 1/N heuristic. Using the heuristic means equally distributing resources among the available options. The heuristic was found to be successful in the stock market [17] and also been found to describe parental resource allocation decisions: parents typically allocate their time and effort equally amongst their ...
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as stock that is only traded privately, such as shares of private companies that are sold to investors ...
Interactive Brokers Chief Markets Strategist Steve Sosnick joins Yahoo Finance Live to discuss stock futures, retail sales, consumer spending, inflation, the Fed, and the outlook for the economy.
The Elliott wave principle, or Elliott wave theory, is a form of technical analysis that helps financial traders analyze market cycles and forecast market trends by identifying extremes in investor psychology and price levels, such as highs and lows, by looking for patterns in prices.
The stock market's demonstration of the situation is often described as all boats float or sink with the tide, in the popular Wall Street phrase "the trend is your friend". In the last decade, investors are also known to measure market sentiment through the use of news analytics , which include sentiment analysis on textual stories about ...
A specific example of this criticism appears in some explanations of the equity premium puzzle. [80] It is argued that the cause is entry barriers (both practical and psychological) and that the equity premium should reduce as electronic resources open up the stock market to more traders. [81]
Greed and fear refer to two opposing emotional states theorized as factors causing the unpredictability and volatility of the stock market, and irrational market behavior inconsistent with the efficient-market hypothesis. Greed and fear relate to an old Wall Street saying: "financial markets are driven by two powerful emotions – greed and fear."