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The New Roaring Twenties? Why You Need to Be Wary of Market Fever.

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While the country has struggled before, it has never been tested with so many consequential and diverse challenges at once. First and foremost, COVID-19 has been the most significant and widespread pandemic of modern times, the fallout of which has affected lives on countless fronts. Second, in addition to the health implications of the coronavirus, the U.S. has experienced the most precipitous economic drop since the Great Depression, with massive job losses and shutdowns of numerous sectors of the economy. Next, last year’s racial unrest has renewed attention to long-standing fissures in the country’s social fabric. Last but not least, deep political divisions and the spread of misinformation have damaged democratic norms, in part leading to the first breach of the U.S. Capitol since 1812.

The peaks of most of these once-in-a-generation challenges seen to be behind us now. And, while the road to full recovery as to all of them will be long — and there are many miles to go — Americans are starting to see light at the end of the tunnel.

As the nation and the economy reawaken, it may be instructive to look back at a period of American history that bears important similarities: The Roaring Twenties.

Following the gloom and austerity wrought by the Spanish flu and World War I, the beginning of the 1920s exploded with prosperity. The economy boomed with new technologies and mass-produced goods, from automobiles to radios to vacuum cleaners. Credit flowed easily, and the stock market surged. Women secured the right to vote under the Nineteenth Amendment.

Related: Top Gaming Stocks To Buy Now? 4 Names To Watch.

But celebration eventually morphed into excess, which manifested into a growing “mother of all bubbles” amid surging conspicuous consumption. Investors began putting money into more speculative ventures without knowing how they worked and with little regard for risk.

By 1929, the pendulum swung hard and the financial markets – and the entire economy – came crashing down. So began the Great Depression.

If history is any guide, the country’s current rebirth and surging optimism could lead to excess and a possibly new Roaring Twenties — the 2020s — and with it similar risks.

Related: What to Do When Your Portfolio Bores You: Go Skydiving........

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