25 years ago today, the Nasdaq Index hit its peak level before declining by almost -80% as the Dot Com Bubble burst. That dramatic destruction of value took 15 years to fully recoup. However, with the NASDAQ down roughly -10% from its most recent peak, it’s clear from the chart below that this type of market behavior is a common occurrence that generally reverses in a much shorter time frame.
Incredibly, despite this long history of market resilience, investor sentiment is currently as low as it was in 2022 when stocks declined -18% for the year (-27% at their nadir) while bonds concurrently fell by over -13%.
As Fundstrat points out, big up days in the equity markets tend to be clustered around drawdown periods, and it can be very costly to not be invested during the 10 best days of the year.
March 10, 2025
25 years ago today, the Nasdaq Index hit its peak level before declining by almost -80% as the Dot Com Bubble burst. That dramatic destruction of value took 15 years to fully recoup. However, with the NASDAQ down roughly -10% from its most recent peak, it’s clear from the chart below that this type of market behavior is a common occurrence that generally reverses in a much shorter time frame.
Incredibly, despite this long history of market resilience, investor sentiment is currently as low as it was in 2022 when stocks declined -18% for the year (-27% at their nadir) while bonds concurrently fell by over -13%.
As Fundstrat points out, big up days in the equity markets tend to be clustered around drawdown periods, and it can be very costly to not be invested during the 10 best days of the year.