Why financial bubbles burst

Investors should stay calm, do their homework, and have patience to wait for their thesis to play out, even if this means being contrarian

Ruth Saldanha 25 January, 2019 | 7:00PM

Starting with the tulip mania in the 1600s, to the stock market crash before the Great Depression, to the dotcom frenzy, market bubbles have been around for a long time. Though the bubble itself changes, the idea of bubbles persist.

In recent times, bitcoin has been called the latest bubble – in 2018, the cryptocurrency lost almost 80% of its price, from over US$16,000 in January 2018, to a little under US$3,200 in December 2018.

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Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca

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