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Op-Ed: Is the Nasdaq Composite a death trap or a springboard for wealth accumulation?

On May 17, 2022, we began a series of educational columns to educate investors during these trying times of increased market uncertainty, high volatility, and double-digit downturn. Today is the Nasdaq Composite’s turn.

The Nasdaq is an index of similar securities that list on the NASDAQ. The Dow Jones Average, S&P 500, and the Birling Capital Puerto Rico Stock Index are one of four indexes we follow daily and one of the leading three indices that investors track in the U.S. stock markets.

The Nasdaq Composite is quite particular as it is focused and weighted with a bias toward technology stocks.

The Nasdaq hit its all-time high of 16,057.44 Nov. 19, 2021, and has been on a steep decline since then; when you consider May 20, 2022’s, close of 11,354.62, it has fallen 4,702.82 points or 29.28%. We evaluate the Nasdaq Composite crossing the 16,057.44 level; we analyze how it took to take the Nasdaq from 5,000 to this record level and then down. Most investors know the Nasdaq as an index of great tech stocks with tremendous growth.

However, did you know that the Nasdaq had a very tough period of 15 years? Yes, 15 years.

You may remember or have read about the dot-com bubble burst of 2000. There was quite a hubris that arose during the late 90s over anything related to the then-nascent internet. It was a period marked by the creation of hundreds of companies that, although they had outsized stock valuations, their business models could not generate profits. Before the bubble burst March 10, 2000, the hubris had made the Nasdaq Composite triple in value in just 18 months, to close at 5,048.82; by Dec. 31, 2000, the Nasdaq had fallen to 2,470.51 a decrease of -51.07%.

The Nasdaq began trading Nov. 5, 1984, at 248.41 points.

The Nasdaq reached 2,029.31 points taking 14 years, one month, and seven days to do so, Dec. 11, 1998.

Then it got to 5,048.82 points taking one year and two months, and twenty-eight days to do so March 10, 2000.

The Nasdaq took an astonishing fifteen years to close above 5,000, closing at 5,026.42 points March 20, 2015.

Then it reached the 6,000 mark when it closed at 6,025.49 points April 25, 2017, taking two years, one month, and five days to achieve it.

On Jan. 2, 2018, the Nasdaq hit the 7,006.90 points mark in only eight months and ten days.

The ride continued upward, and in two years, one month, and 19 days later, it reached 9,576.59 points Feb. 21, 2020.

As the pandemic arrived, the Nasdaq hit 6,879.50 points March 20, 2020, a decrease of 28.16% just 28 days later.

The tech stock recovery was astounding during the pandemic, reaching 13,965.49 points on Feb. 17, 2021, only 10 months and 28 days later.

The Nasdaq hit the elusive 16,000-mark Nov. 19, 2021, when it closed at 16,057.44 points in just nine months and two days.

Then 2022 ushered in the mix of factors that include the Ukrainian war, inflation fears, interest rate cycle changes, and global economic slowdown taking the Nasdaq on a ride downward to close at 11,354.62 points May 20, 2022, 4,765.82 points or 29.28% from its high.

As we consider the rise and fall of the NASDAQ, let’s review the yearly returns from 2015 to YTD 2022:


2016: 8.87%

2017: 29.64%

2018: -2.84%

2019: 36.69%



2022 YTD: -27.20%

As you review these results, consider that the last five-year return reached 87.39%, and the 10-year returns reached 304.9%. 

Moreover, understanding well the Nasdaq and its behavior could help you obtain significant returns when you add the Nasdaq to your diversified portfolio of stocks; some notable ETFs include:

  • Fidelity Nasdaq Composite ETF (ONEQ): with a three-year return of 50.57%, a five-year return of 96.69%, and a 10-year return of 343.60%;
  • iShares Nasdaq 100 ETF (CAD-Hedged) (XQQ.TO): with a three-year return of 55.70%, a five-year return of 102.30%, and a 10-year return of 368.90%; and,
  • Fidelity Nasdaq Composite Index (FNCMX): with a three-year return of 49.82%, a five-year return of 92.35%, and a 10-year return of 339.10%.

In conclusion, these are some notable companies from the dot.com era still alive and the stock price May 20, 2022.

Author Francisco Rodríguez-Castro is president of Birling Capital.

  • Amazon (AMZN): the stock closed at $2,1512.82;
  • Booking Holdings, known as Priceline.com (BKNG): the stock closed at $2,115.90;
  • eBay (EBAY): the stock closed at $44.31; and,
  • Shutterfly: Now a private company owned by Apollo Global Management.

On every occasion that the Nasdaq Composite surpasses another milestone, whether 5,000 or 16,000, it becomes front-page news. These milestones become benchmarks for investors seeking to enter the market at opportune times and become steppingstones for most.

As the investor base has broadened chiefly with millennials, understanding the Nasdaq Composite and its history will serve them well as they focus on growth in the new investment world.

By now, you can decide whether the Nasdaq Composite a death trap or a springboard for wealth accumulation, having studied the data, we can conclude that markets recuperate quickly; having defined long-term financial goals, diversification, patience, and a trusted advisor will serve you well in trying times.

My critical advice is to “Become an opportunistic investor when others are fearful.”

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This story was written by our staff based on a press release.

1 Comment

  1. Nestor May 24, 2022

    Flat is the new up…


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