The Psychology of Market Bubbles
Since market bubbles have been around for a long time and are likely to re-occur, it can be very helpful for investors to understand the psychological influences that lead to bubbles and crashes. Stephen P. Utkus of Vanguard has outlined a four-stage model of market bubbles, including the psychological behaviors that characterize each stage.
Utkus' study also takes a look at how technology might actually amplify psychological tendencies, as well as the techniques to mitigate bubble psychology. Click here for the white paper "Market Bubbles and Investor Psychology."