Understanding Financial Bubbles and Their Impact on Investors

A financial bubble happens when the price of something, like stocks, goes up really fast, but the actual worth of the companies doesn't.

This often happens because people get too excited and think prices will keep going up.

The dot-com bubble is an example.

But when people realize things aren't as good as they thought, they start selling, and prices crash.

It's like a balloon that pops.

If you buy in early, you might make money.

But if you buy when prices are already high, you could lose a lot.