Is there a bubble in the stock market again?

• OneBuckeye

  

  and will it burst? A question for the financially savvy huddlers. With the DOW going up to 10,500, is it too high? Unemployment is high and the economy is far from recovered. Why does the stock market contiue to go up?
• j_crazy

  

  I don't know about the stock market in general, but the company I work for has one of the most perplexing stocks on the market. it's way undervalued at 35 (where it is now) and early this year it was down around 21 and I gobbled up some shares there. I'm young so I feel safe taking big risks with money, but like you, I'm not sure why the markets are up when there is little reason to justify it.
• OneBuckeye

  

  ^ I agree my companies stock is undervalued but still not back to 2008 levels. The Dow isn't back to 2008 levels 11500-12500 but it seems to be getting close and for no reason.
• Cleveland Buck

  

  Oh yes. Big time. The stock market is going up because these investment banks have billions of dollars of free government money to move around without consequence. Commodity stocks are also up as the dollar weakens and gold and oil rise. The only positive economic news has been a direct result of government spending programs, so the real economy has accomplished little or nothing to justify this stock market rally.
• OneBuckeye

  

  So what is the chance of a big bubble burst in the near future.
• sleeper

  

  If you're under 30, you should be buying stocks. It may or may not be a bubble, but a lot of people smarter than anyone here obviously think the market is valued correctly. It may go down big again, but I'd just buy more. The average return on the stock market is usually 12%, and that's good enough for me.
• darbypitcher22

  

  some of my stocks have been up and down, but they've generally been pretty stable.
• Cleveland Buck

  

  OneBuckeye wrote: So what is the chance of a big bubble burst in the near future.

  It depends. There may not be a 4,000 point crash again. If the economy actually recovers (and isn't just propped up by government programs, BIG if), and the Fed and the Treasury gradually ease back on the easy money they are pumping into the system, the rally would slow down but you probably wouldn't have a crash, maybe just a sell off period. If the economy doesn't recover and they keep printing money until the value of the dollar is irreparably damaged, then you will have a severe crash. We just have to wait and see.