Investigate The Causes, Consequences, And Preventive Measures to Get Rid of Stock Market Bubbles Trap
Amandeep Kaur (MBA) Lovely Professional University.
Ritika Rehan (MBA) Lovely Professional University.
Nitish Kumar (MBA) Lovely Professional University.
Nikhil Soni (MBA) Lovely Professional University
Dr. Navneet Raj (Assistant professor) Lovely Professional University
ABSTRACT
The stock market bubble phenomenon has been a key focus of financial studies due to its significant influence on economies and investors. This research investigates the causes, effects, and preventive strategies of stock market bubbles using a quantitative research method. Primary data were gathered through a structured Google Forms questionnaire, collecting responses from 96 investors with different levels of experience and market knowledge.
The study utilizes statistical methods like descriptive statistics, Chi-Square tests, correlation analysis, and ANOVA for investigating investor attitudes and behaviors. Findings suggest that excessive speculation and herd behavior are key drivers for stock market bubbles, with considerable differences in risk evaluation approaches between levels of investor experience. The Chi-Square test verifies a positive correlation between investment experience and recognition of stock market bubbles (χ² = 19.46, p = 0.00022). Also, ANOVA findings indicate a statistically significant difference in risk evaluation approaches according to investment familiarity (F = 9.40, p = 0.00019).
Visual graphs, such as histograms, bar graphs, and box plots, further demonstrate how sophisticated investors embrace sophisticated risk management methods, whereas inexperienced individuals use analyst views or do not evaluate risks. The results emphasize the role of financial knowledge and diversified investment approaches in alleviating the negative impacts of stock market bubbles.
The current research is informative for investors, regulators, and policymakers through stressing the necessity for investor education, regulatory guidelines, and aggressive risk assessment mechanisms. By cultivating an educated investor environment, financial markets can be reinforced against speculative bubbles and their ruinous impact.
