* Investors allocate their resources to different asset classes according to their...

* Investors' main object is to grow their wealth AND beat inflation, usually over the medium-long term (10+ years).

* When the prices of stocks or other assets grow quickly and for no objective reason, it is the beginning of irrational price growth known as a 'bubble'

* When a 'bubble' bursts, the underlying prices of the assets/goods/services that caused that bubble collapse to pre-'bubble' levels

* Each bubble is different but there are a few patterns of investor-behaviour common to most bubbles and prompted by so-called 'Irrational exuberance'

2) Past success: what was successful once will be successful again

Why do bubbles burst?
Good question...
There are usually a few reasons.
Some call this 'The Greed/Fear Cycle'

FEAR starts with
* Panic selling: other investors find out and they too sell off, prompting panic stock sales

* Trust and confidence evaporate, investors seek 'safe havens', such as sovereign bonds
* More people start saving and cutting on their expenses because they expect things to get worse

GREED SETS IN
* With stock prices at rock bottom levels, some investors/speculators
buy shares, hoping to make a high profit when prices pick up