Bursting the Bubble Tulips were the first, but they won’t be the last. What forms a “bubble” and what causes them to burst? Share | Related Content The Cycle of Investing Understanding the cycle of investing may help you avoid easy pitfalls. The Investment Risk No One’s Ever Heard Of You face a risk for which the market does not compensate you, that can not be easily reduced through diversification. Impact of Taxes and Inflation Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.