Stock Market Summary

Stock Market Summary

Stock Market Summary

Stock market bubbles can form in anything from tulips to bicycles. The dangerous thing especially for new investors is that they get in on the action too late usually just before the bubble bursts and watch their investment plummet.

Tulip bubble

The tulip bubble of 1637 came about when tulips from Turkey were introduced to the Dutch. The novel flower soon started to grow in popularity. Around the same time many of the tulips became infected by disease this did not destroy the flowers but caused their colouring to become very unusual. The already sought after new flower became even more in demand.

More and more joined the bandwagon of bulb buying with the idea of selling at higher prices. Investing in the tulip business was the thing. The tulip bulb prices soon became an unrealistic reflection of their actual worth. A few started to sell the bulbs making a tidy profit. A domino effect followed leading eventually to more sellers than buyers. As the bulb prices plummeted so did the value of investments with those latest to leave the party losing the most.