14 April 2000: The Nasdaq drops nearly 10% in a day
On April 14, 2000 the Nasdaq Composite fell about 9.7%, one of its worst days ever, and the Dow lost more than 600 points. A hotter-than-expected inflation report set it off, but the real problem was valuations that assumed perfection. The Nasdaq lost about a quarter of its value that week. It would not regain its March 2000 peak for some 15 years.
The lesson: When prices assume everything will go right, it takes only modest bad news to start the fall.
What it meant for investors
$1,000 in Nasdaq 100 index fund at the start of 2000 → $6,486 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the year it happened. That is 6.5 times the money, and $1,861 more than a plain index fund made over the same years.
What Nasdaq 100 index fund teaches: A great industry bought at a crazy price can take fifteen years to break even, so the price paid matters even when the story turns out right.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $3,700 | $6,486 | $4,626 |
| 2003 | $1,000 | $24,000 | $7,727 |
| 2005 | $1,600 | $15,000 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought Nasdaq 100 index fund? Every starting year and the full story →
More Nasdaq 100 index fund history
- 8 February 1971: Nasdaq opens for business
- 10 March 2000: The Nasdaq peaks at 5,048
- 10 June 2020: The Nasdaq closes above 10,000
- 9 August 1995: Netscape's IPO kicks off the dot-com era
- 22 August 2013: Nasdaq freezes for three hours
- 31 December 1999: Nasdaq ends its best year ever
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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