A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Valuation-Informed Indexing #726: Irrational Exuberance Is a Form of Inflation

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I’ve posted Entry #726 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Irrational Exuberance Is a Form of Inflation.

Juicy Excerpt: Irrational exuberance is another way to make people feel richer without actually doing so. Irrational exuberance gains are nominal gains. On a portfolio statement, they look just as good as real, economic-based stock-market gains. But of course, they are very different. They don’t last. They get the investor who believes in them in big trouble somewhere down the line.