New paradigm

New paradigm is a group of new beliefs that replace old set, which is believed no longer to apply. The term is used in different meanings depending on the area where is is used;

New paradigm in financial markets

The new paradigm in investment is usually referred to important changes on the market that lead to development of new investment strategies. Such a paradigm shift happens after every large speculative bubble. In early 2000s the dotcom speculative bubble created new paradigm saying that dotcom companies won't grow forever. Other speculative bubble on subprime morgage in middle of 2000s lead to crisis and new paradigm saying that markets are never on uninterruptible path of growth. What's interesting, the same paradigm was found after 1930s crisis. However, as scientific research show, memory of investors is usually no longer than 2 years back.


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