When the market reaches an unbelievable high, it usually results in a bubble. But because the levels are unsustainable, investors end up panicking, leading to a massive selloff. This results in a market crash. That’s what happened in the early 2000s with the dotcom bubble, when the values of tech stocks shot up beyond what the companies were worth. We saw the same thing happened when the housing bubble burst and the market crashed in the mid-2000s.
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