From Inc · · 50s
Tech Bubble Burst History Shows Stocks Hold Value
Historical data reveals tech crashes don't wipe out all stocks.
In brief
Historical data reveals tech crashes don't wipe out all stocks. The dot-com bubble burst didn't crash all stocks; mega-caps suffered most while equal-weight stocks gained. Originally reported by Inc.
Tech Bubble History
The dot-com bubble burst in 1999-2001 showed stocks didn't crash entirely.
“The last time a generational tech bubble burst, the average stock still made money.”
S&P 500 Performance
S&P 500 Equal Weight index gained 5% including dividends from 1999-2001.
“From the end of 1999 through the end of 2001, the S&P 500 Equal Weight index returned more than 5 percent including dividends, according to data from Bespoke Investment Group.”
Market-Cap Weighted Impact
Market-cap weighted index lost 20% during the same period.
“Over the same stretch, the market-cap-weighted index lost about 20 percent.”
Current Market Split
S&P 500 fell 0.47% while average stock gained 1% in recent week.
“A smaller version of this divide played out over the last week. The S&P 500 fell 0.47 percent while the average stock in the index gained about 1%.”
Investor Impact
Equal-weight investors outperformed tech-heavy indices during crashes.
“That means investors who owned every company equally came out ahead while the tech-heavy index sold off.”
AI Crash Concerns
Wall Street fears an AI crash could hit tech stocks hardest.
“If that does happen, history says mega-caps take the worst of it.”
The short version
The dot-com bubble burst didn't crash all stocks; mega-caps suffered most while equal-weight stocks gained.
