Is There a Stock Market Bubble? Warning Signs to Consider
Every investor has heard the warning of a potential stock market bubble. However, when markets are rising due to optimistic expectations for future growth, high prices seem reasonable.
During a boom, warnings of bubbles and crashes are often ignored, with statements like
"we've entered a multi-year bull market"and
"there's so much money on the sidelines waiting to invest"dominating the narrative.
It's worth noting that the concept of "money on the sidelines" is often misunderstood. When cash is used to buy stocks, it is given to vendors who exchange shares for cash, which means there must always be cash on the sidelines.
This article was first published in The Australian on 06 October 2025.
Author's summary: Investors should be aware of potential stock market bubble warning signs.