The impact of market bubbles on investment returns.

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A market bubble refers to a situation where the prices of assets, such as stocks, commodities, or real estate, rise to unsustainable levels due to speculation and hype. Prices fall when the market collapses, leaving investors with huge losses. Market bubbles can have a disastrous effect on investment returns because many investors risk losing a sizable amount of the value of their portfolios. Market bubbles like the dot-com boom in the early 2000s and the housing bubble in the middle of the decade resulted in severe financial losses for many investors. Investors should exercise care, stay away from investments based on hype, and concentrate on long-term plans that are based on fundamental analysis in order to reduce the influence of market bubbles on investment results.