Is the stock market bubble about to burst? Ray Dalio dropped 4 hard truths: 1. Don’t rush to sell just because you see a bubble! Seeing a bubble doesn’t mean you should immediately run for the hills. History shows that before a bubble bursts, there’s often one last insanely aggressive rally. For example, in 1928, people were calling out the bubble, but the market still surged another 90% before crashing. Same thing in 1999—after the bubble warnings, it still shot up another 40%. 2. What exactly is a bubble? A bubble isn’t just about high prices. It’s an illusion built on “unsustainable buying frenzy” and “ridiculously distorted valuations.” It’s like a balloon inflated to its limit, held together by nothing but hot air. The moment a needle pricks it, it’s game over. 3. Jump in now, and you might waste the next 10 years! The market might not crash immediately, but history paints a harsh picture: if you buy during a period of extreme overvaluation (like when the P/E ratio > 23), your annualized returns over the next 10 years are likely to be between -2% and 2%. In other words, holding onto stocks long-term during a bubble might leave you with nothing to show for it. 4. The real bubble-popper? A cash crunch. Paper wealth is just numbers—you can’t use stocks to buy groceries or pay bills. When people face a liquidity crisis and are forced to sell stocks for cash to pay off debts, that’s when the stampede begins, and the bubble pops. Looking at all the indicators, there’s no doubt the market is already deep in bubble territory.