2000 | OriginalPaper | Chapter
Are we facing a stock market bubble?
Author : David I. Fand
Published in: Financial Structure and Stability
Publisher: Physica-Verlag HD
Included in: Professional Book Archive
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The explosion of equity prices since 1995 has led some analysts to conclude we are facing an asset bubble in the stock market. In the period February 1995 - July 1997 the Dow-Jones index doubled from 4000 to 8000; in the period November 1995 - May 1999, the Dow doubled from 5000 to 10,000. Overall equity prices in the four years 1995-1998 grew at the amazing and spectacular annual rate of 28%. The stock market returns in the latter half of the 1990s are significantly higher than the average and among the highest ever recorded. (See Table 1 and Table 2)