31 December 1999: Nasdaq ends its best year ever
The Nasdaq Composite closed 1999 up about 86 percent, the best year in its history, as dot-com stocks soared and the feared Y2K computer bug turned out to be mostly harmless. Investors toasted the new millennium believing technology had changed the rules. The Nasdaq peaked about ten weeks later and then lost nearly 80 percent by late 2002.
The lesson: A spectacular year is often the time to rebalance, not to borrow more.
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 first year in our price data after the event. 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
- 14 April 2000: The Nasdaq drops nearly 10% in a day
- 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
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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