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Overvaluation is when an asset or stock is priced higher than its real worth, often due to high demand, speculation, or investor optimism.
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Overvaluation means a stock, company, or asset is priced higher in the market than its actual or fair value. In this case, investors pay more than what it is truly worth based on its financial performance or fundamentals.
Causes of Overvaluation
High demand for shares due to investor interest.
Excessive speculation where people buy only because prices are rising.
Too much optimism about future growth and profits.
Economic factors like low interest rates that make investors willing to pay more.
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