What Does a Bubble Look Like and How Can we Capitalize on It?

Before we talk numbers, let’s talk emotion.

Every market bubble is built on human behavior: hope, excitement, greed, denial, fear, and, finally, despair. These emotions don’t just move the chart; they are the chart.

Look at the image above, the Stages in a Bubble.

It starts quietly in the Stealth Phase, when only a few “smart money” investors are willing to take the risk. Confidence builds in the Awareness Phase, as institutional investors begin to buy in. Then comes the Mania Phase, when the public floods in fueled by media attention, enthusiasm, and the belief in a “new paradigm.”

This is where emotion takes control.

Greed and euphoria replace logic. Everyone wants in, and no one wants to miss out. Prices soar far above fundamentals until one small shift turns confidence into fear. Then comes the Blow-off Phase: denial, panic, capitulation, and despair.

That emotional rollercoaster has repeated itself for centuries from tulips to dot-coms to crypto. The names change, but the feelings don’t.

Take Yahoo as an Example:

In January 1998, Yahoo traded around $4 a share. By December 1999, it had skyrocketed to $118. All along the way, traditional money managers, what I like to call the “fundamentalists” warned it was overvalued. And yet, they missed a move of nearly 3,000%.

The modern investor, however, recognizes opportunity. They ride the momentum while managing risk, selling gradually into strength or using trailing stops to lock in gains. When Yahoo eventually collapsed back to $4.50 by September 2001, the disciplined investor had already secured profits and moved on.

So, which investor do you want to be?

Now, as AI headlines dominate and everyone wants a piece of the action, we’re clearly deep into the Public Phase .There’s media attention, enthusiasm, and that unmistakable sense of “this time it’s different.” It’s not unlike the start of the Mania Phase on the chart above, where greed and excitement take over logic, and prices start rising simply because they’re rising.

So when people ask me, “Is this an AI bubble?”, my answer is simple:

Yes, maybe and that’s okay. The opportunity is real, but so are the emotions that can derail it. The goal isn’t to avoid volatility, it’s to navigate it with awareness, strategy, and support.

If you don’t have the nerves or time to handle that alone, work with a coach or advisor who understands the emotional side of investing. Because in every bubble, there’s wealth made by those who manage risk, not by those who avoid the moment.

👉 Explore how She Wealth Advisors can help you invest with confidence.