1999 is again, and I’ve missed it. Ever since then, I’ve been chasing that subsequent 50-bagger, the form of life-changing winner that helped me give you the down cost for my first property. However he is been elusive.
I nonetheless keep in mind sitting on the worldwide buying and selling flooring at Goldman Sachs at 1 New York Plaza, glued to my display screen as web names like Commerce One and Yahoo soared increased nearly day by day. My agency had simply gone public, immediately turning the companions into decamillionaires. The power was electrical – optimism in all places, fortunes being made, CNBC blaring nonstop.
Quick ahead to right now: tech shares are main once more, crypto buyers are shopping for Lambos, and AI is woven into all the pieces – our telephones, portfolios, and day by day conversations. San Francisco, as soon as quiet through the pandemic, is buzzing once more. Startups are hiring and everybody’s speaking in regards to the subsequent huge factor.
And I’ll admit, I’m hyped. We have now the potential to get extraordinarily wealthy over the following 5 years.
Then the 2000 dot-com crash vaporized trillions in wealth and taught me one of the essential classes of my life: euphoria all the time feels rational till it doesn’t. Ah, cheers to irrational exuberance.
The Return Of The 1999 Environment
I’m investing in public tech shares, personal development shares, slightly little bit of Bitcoin, and San Francisco actual property, which all really feel poised for continued development.
Again in 1999, I promised myself that if the mania ever returned, I’d lean in tougher, however smarter. Now, with buyers as soon as once more betting on infinite development, that point has come.
So how can we steadiness greed with knowledge? How can we journey this wave of innovation with out repeating the errors of the previous? Let’s discover what historical past teaches us and find out how to navigate this AI-driven rocket responsibly.
As a result of frankly, with much more capital at stake, I don’t need to lose my shirt once more. However even when I do, I’ve heard the “dad bod” is probably the most enticing male physique kind, making us really feel approachable, secure, and mature.
What Makes This Time Totally different (and What Doesn’t)
Sure, this time is completely different, and that’s precisely what everybody says earlier than each bubble bursts. However there are some key distinctions price acknowledging.
- AI has tangible productiveness results. Not like many dot-com concepts that by no means made cash, AI is already saving corporations billions.
- Steadiness sheets are stronger. Company debt masses are more healthy than in 1999 and 2007, and lots of companies are flush with money.
- Sturdy earnings and money stream. As well as, the most important tech corporations are producing huge free money stream.
- Customers are additionally a lot stronger. Family leverage is decrease than in 1999 and 2007 as effectively.
- Financial coverage is popping supportive once more. Amazingly, the Fed is resuming its rate of interest cuts with all the pieces at all-time highs, offering a tailwind for threat belongings.
That mentioned, the psychology of manias by no means modifications. Folks overestimate short-term good points and underestimate long-term disruption. AI is actual, however that doesn’t imply each AI inventory is. Some corporations will go to the moon; the overwhelming majority will go to zero.
That’s why perspective and diversification matter greater than ever.
How I’m Positioning for The New Mania
Right here’s how I’m approaching this cycle, and a few options if you happen to’re feeling swept up by the hype. As we must always all keep in mind, there aren’t any ensures in threat belongings. All the time do your due diligence and make investments based on your individual objectives and threat tolerance.
1. Keep Invested, However Keep Publicity Limits
I’m absolutely collaborating on this bull run however will trim particular person positions as soon as they exceed 10% of my portfolio. A concentrated portfolio works, till it doesn’t.
The ten% threshold is considerably arbitrary. It’s best to give you your individual consolation stage. Based on trendy portfolio idea and supporting research, holding round 20 to 30 positions is often sufficient to realize many of the advantages of diversification alongside the environment friendly frontier, roughly a 3% to five% allocation per place.
It’s not sufficient to simply monitor your funding portfolio’s composition, you additionally have to view it within the context of your total web price. Have a look at how a lot you might have in money, actual property, options, bonds, and low-risk belongings.
Personally, I purpose to maintain public equities between 25% and 35% of my whole web price. That allocation provides me the boldness to remain the course throughout downturns. If the common bear market declines about 35%, that may translate to roughly a ten% hit to my total web price, which I can comfortably abdomen.
Verify how a lot of your web price you are comfy shedding.
2. Shift Extra In direction of Actual Belongings
1999 via 2009 taught me that shares are humorous cash with no actual utility. You’ll be able to’t drink your shares, dwell in your shares, or bodily get pleasure from them. The one method to profit is to promote some shares infrequently to fund a greater life.
One of the best asset I’ve discovered that gives each potential appreciation and real-world utility is actual property. There’s no higher feeling than watching your house respect in worth whilst you truly get pleasure from residing in it. When you have youngsters, that satisfaction multiplies. You’re not simply constructing wealth, you’re offering stability and reminiscences in your most treasured belongings.
I’m lengthy as a lot San Francisco actual property as I can comfortably deal with, a major residence and three leases. AI corporations are increasing, housing demand is rebounding, and actual property stays one of many few tangible hedges towards each tech volatility and inflation.
3. Growing Non-public Firm Publicity
I am investing immediately into AI corporations via numerous closed and open-ended enterprise capital funds with as much as 20% of my investable capital. All the closed-end enterprise capital funds cost 2% and 20% of earnings or extra, and are invite solely. Whereas Fundrise Enterprise is open to everybody and would not cost any cary.
Again in 1999, I had ~$8,000 to speculate after receiving my signing bonus ($5,000 + my current $3,000 from part-time jobs in faculty). So I invested $3,000 in VCSY, a Chinese language web firm that 50Xed. Nevertheless, to make life-changing cash requires a a lot bigger quantity of invested capital. So this time round, I am investing seven figures whereas staying inside my 20% publicity restrict.
Under is a chart that ought to each scare and excite you. Each enterprise capital basic companion thinks they’ve invested, or will make investments, within the subsequent AI winner. However as a 20-year restricted companion in enterprise capital, I’ve seen that roughly 90% of investments both go to zero or return solely modest capital.
For that cause, a basic companion should both have a great observe file or the fund should already personal corporations you strongly consider in earlier than it’s price investing. I am hedged by investing in each kinds of enterprise capital funds.
4. Keep Liquidity To Purchase The Dip And Survive
After the 1999–2000 and 2008–2009 downturns, I promised myself I’d all the time maintain at the very least one yr of residing bills in money or money equivalents like Treasury payments, and I nonetheless do. Liquidity buys peace of thoughts. It helps you to each survive and purchase the dip when markets crash.
Fortunately, money and Treasury payments now pay a good-looking ~4% risk-free return. That makes the so-called “money drag” in a 1999-style bull market far much less heavy.
Corrections are inevitable. If you happen to don’t have liquidity prepared, you’ll be compelled to sit down in your palms as an alternative of take full benefit.
5. Do Not Purchase Threat Belongings On Margin
Though the temptation to leverage up in a 1999-style bull market is excessive, don’t do it. If we actually are reliving 1999, keep in mind what got here subsequent: the NASDAQ crashed 39% in 2000 and in the end fell 78% from peak to trough by 2002. Even if you happen to have been solely 50% on margin again then, chances are high you have been worn out.
At this time, loads of buyers are making the identical mistake in cryptocurrencies (altcoins), leveraging 2X to 50X in pursuit of fast riches. Some have made fortunes, however many have additionally misplaced years of hard-earned good points in a single day. That the majority current day was October 10, 2025, when widespread liquidations (~$20 billion) erased whole portfolios attributable to leverage.
If you happen to completely can’t resist the urge, restrict your speculative capital. Carve out not more than 10% of your investable belongings for leveraged punts. And go in understanding the worst-case situation: not solely are you able to lose all the pieces, you may additionally owe cash to your dealer.
In a flash crash, costs can hole down earlier than your dealer executes a cease restrict sale, leaving you with a destructive steadiness. Investing on margin long-term is a nasty concept. Resist the temptation.
6. Embrace The Dumbbell Investing Technique
Throughout manias, investing FOMO typically pushes buyers to take extreme threat. You purchase belongings you don’t absolutely perceive just because you possibly can’t stand watching others get wealthy with out you. As a rule, any such investing results in wreck.
One method to handle that is with a dumbbell technique: break up your portfolio or new investments between low-risk or risk-free belongings and high-risk, speculative bets. This method helps you to seize upside if the mania continues, whereas nonetheless defending your draw back if it fizzles out.
Over the previous a number of years, I have been often utilizing the dumbbell technique to put money into each personal AI corporations and in Treasury payments and bonds. This manner, it doesn’t matter what occurs, I am hedged.
7. Spend And Get pleasure from A Portion Of Your Earnings
Yearly throughout a bull market, I attempt to purchase one thing tangible with my “humorous cash” earnings. This ensures that if, and when, the bear market returns, at the very least I’ll have one thing to indicate for the good points.
For instance, in 2003, I used earnings from VCSY in 2000 to purchase a two-bedroom apartment with a park view in Pacific Heights, a property I nonetheless personal right now. It housed my girlfriend and me for 2 years and now generates semi-passive earnings to assist fund our retirement.
You don’t have to speculate your humorous cash in actual property. Positive artwork, uncommon books, historical cash, and even memorable experiences like a household trip or a cruise in your mother and father all rely. Nice experiences typically respect in worth in ways in which cash can’t measure, particularly now that we will file them in beautiful 4K.
So long as you proceed taking earnings to accumulate significant experiences or materials belongings you worth, a 1999-style bull market can maintain rewarding you lengthy after it’s technically over.
7. Mentally Put together For Monetary Ache & Psychological Anguish
A 1999-style bull market will finally finish badly. We might even face one other misplaced decade, the place threat belongings present little to no actual returns. It might actually occur once more, particularly with the S&P 500 buying and selling at 23X ahead earnings.
Nevertheless, when you examine historical past and perceive how extreme losses can get, the ache isn’t as stunning after they arrive. Listed here are some key statistics:
- 5% corrections: occur 3–4 instances per yr on common.
- 10% corrections: occur about as soon as per yr.
- Bear markets (-20%+ declines): from 1928–2025, there have been ~16, averaging one roughly each 5–6 years.
- Common bear market drawdown: ~35%.
- Median post-1946 bear market period: 11 months, with a median decline of 33–35%.
- Median restoration time to all-time highs: 23 months.
In different phrases, mentally take your fairness publicity and lop off 35% of its worth instantly. Ask your self: are you able to deal with shedding that a lot and ready roughly two years to get again to even? If sure, you’re good to go. If not, you must make changes.
You’ll be able to even use my FS-SEER method to quantify your threat tolerance by way of time, serving to you intend your allocations extra confidently.
7. Revisit your earnings streams.
Your earnings streams are essential for staying afloat throughout a bear market, but they typically get neglected in a bull market. That’s why it’s essential to checklist out your numerous sources of earnings and rank them by reliability. When the bear market hits, how safe will they be?
If you’ll all the time earn sufficient to cowl your loved ones’s residing bills, you possibly can afford to take extra threat. But when a lot of your earnings streams are prone to collapse in a downturn, you must alter your publicity accordingly. Make a sensible estimation of how far they could decline.
The secret’s to construct numerous sources of earnings earlier than you really need them. By the point you do, it could already be too late.
8. Focus On Well being And Life-style
Bull markets could make you overlook what actually issues: well being, mates, and household.
Again in 2009, my stress ranges have been via the roof as I watched roughly 40% of my web price vanish in six months that took a decade to construct. My again ache made it nearly inconceivable to drive or sit, and I used to be grinding my enamel relentlessly. My TMJ was so dangerous I couldn’t discuss comfortably for greater than 5 minutes at a time. I needed to discover a means out of dedicating my life to finance.
At this time, I attempt for steadiness, a aim made far simpler with no 60-hour-a-week job. I begin the day with 1-2 hours of writing, then typically play tennis, coach my children, and remind myself that wealth is meaningless if you happen to don’t have the power to get pleasure from it.
In your pursuit of riches, please don’t neglect your well being! It would come to chunk you within the arse finally.
Don’t Confuse Brains With a Bull Market
It’s intoxicating to really feel sensible in a rising market. Positive aspects reinforce confidence, and confidence feeds risk-taking. However the reality is, in bull markets everybody seems to be sensible, till the rocket blows up.
When the 2000 crash hit, I I watched multimillionaire colleagues lose all the pieces they’d constructed attributable to extreme leverage. The barber on the basement of 1 New York Plaza not bragged to me about his wins whereas he minimize my hair. In truth, he mentioned he needed to promote his two Mercedes after the crash. Markets giveth, and markets taketh away.
Don’t let a bull market persuade you that you simply’re invincible. Let it remind you that self-discipline is what retains you wealthy when you get there.
The Happiness Hedge
It would sound counterintuitive, however among the best hedges towards monetary loss is emotional contentment.
Throughout increase instances, it’s simple to maintain elevating the bar – extra money, extra property, extra automobiles, extra partying, extra all the pieces. However if you happen to’re already at a 7 or 8 out of 10 on the happiness scale, chasing a ten would possibly truly ship you backward.
Happiness comes from steadiness: significant work, good well being, household time, mates, and sufficient cash to regulate your schedule. Every thing past that’s gravy over your ego.
So sure, I’m leaning into this AI-driven bull market. However I’m additionally reminding myself that monetary freedom is just price it if you happen to’re truly free. We will stop ourselves from being slaves to cash by having a correctly structured portfolio and a monetary plan below any situation.
Trip the Wave, However Know A Jagged Shore Might Await
The power right now feels electrical, similar to 1999. And I like it. I need to see folks make nice fortunes to allow them to have the liberty to do what they need. Think about telling your micromanaging boss to screw off someday. Superb!
Traders might expertise an epic blow off like we 26 years in the past. Simply understand how rapidly the music can cease. Diversify, keep humble, and take some chips off the desk when you possibly can.
Bull markets make you wealthy. Bear markets make you smart. Collectively, they make you full.
So let’s benefit from the journey, however with our eyes open!
For many who’ve been investing since 1999 or earlier, how does right now’s market really feel in comparison with again then? What similarities and variations stand out to you? Does the present AI-driven frenzy remind you of the dot-com increase, or does it really feel like one thing fully new? Are you positioning your self for an additional potential blow-off prime that might make us all so much wealthier or are you bracing for the inevitable hangover? And for youthful buyers who didn’t dwell via 1999, how are you managing your FOMO as everybody round you appears to be getting wealthy once more?
Get A Free Monetary Evaluation Supply From Empower
When you have over $100,000 in investable belongings—whether or not in financial savings, taxable accounts, 401(ok)s, or IRAs—you will get a free monetary check-up from an Empower monetary skilled by signing up right here. It’s a no-obligation method to have a seasoned professional, who builds and analyzes portfolios for a residing, assessment your funds.
A recent set of eyes can uncover hidden charges, inefficient allocations, or neglected alternatives to optimize. A 1999-style bull market has a means of constructing even probably the most disciplined investor slightly delusional. That’s when correct threat administration tends to vanish.
The assertion is supplied to you by Monetary Samurai (“Promoter”) who has entered right into a written referral settlement with Empower Advisory Group, LLC (“EAG”). Click on right here to be taught extra.
Subscribe To Monetary Samurai
Decide up a replica of my USA TODAY nationwide bestseller, Millionaire Milestones: Easy Steps to Seven Figures. I’ve distilled over 30 years of economic expertise that will help you construct extra wealth than 94% of the inhabitants—and break away sooner.
Hear and subscribe to The Monetary Samurai podcast on Apple or Spotify. I interview specialists of their respective fields and focus on a few of the most attention-grabbing subjects on this web site. Your shares, scores, and evaluations are appreciated.
If you wish to keep forward of the markets, be a part of over 60,000 readers and subscribe to my free Monetary Samurai publication. You may also get my posts in your e-mail inbox as quickly as they arrive out by signing up right here. My aim is straightforward: provide help to obtain monetary freedom sooner so you possibly can dwell life by yourself phrases.
