Are We Always Rational When Judging The Markets? Let’s See!
“Bubble” is a word that appears very often in current news articles and television programs dealing with the economy. People are constantly debating the gold bubble, the tech bubble, the housing bubble … but what are these really? If we all agree to pay a certain price for something, what’s to say that it’s not worth that much? If we know that it’s a bubble, can it really be one?
In order to answer some of these questions and really get to the bottom of this “bubble” phenomenon, we decided we’re going to do a little experiment in the office.
Indiana professor Arlington Williams seemed to have a good understanding of what truly makes a bubble, so we thought we would recreate an experiment of his. In his experiment, Professor Williams created a simple stock market for some of his college students.
This time, we’ll create a similar stock market for the people in the Betterment office.
Will our Betterment employees be able to stay smart, or will they fall into the same pattern as millions of Americans and offer more than a stock is worth, only to see that price fall… hard?
We’ll let you know on Wednesday, once we’re done. Every experiment needs a hypothesis, so tweet us (@betterment) and let us know yours!
Frequently Asked Questions about Betterment
Just starting out exploring Betterment? These are the frequently asked questions that help people find their way.
Acceptable Reasons for Holding Unused Cash in Smart Saver
When you aren't yet sure when or how to spend or invest your unused cash, we offer Smart Saver, a managed account designed to handle your extra cash.
Investing’s Pain Gap: What You Put Up with To Earn Returns
Markets are frustrating—especially when you look at a year’s worth of returns. Year to year, you can easily experience what we call the pain gap. The key is to not let the pain gap create a behavior gap between your account and market performance.
Explore your first goal
This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.
Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.
If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.