In short: The dot-com bubble was a historic stock market peak in 2000 driven by excessive speculation in internet companies, followed by a severe multi-year crash. It demonstrated that concentrating capital in a single popular sector carries substantial risk, whereas broad diversification across sectors and a long horizon can help investors ride out a crash, with no guarantee. Past performance says nothing about future results.
March 2000: the peak
The late 1990s saw rapid growth among internet and technology companies. Stock prices climbed quickly alongside them. The tech-heavy Nasdaq Composite reached a peak (close) of 5,048.62 on 10 March 2000. The broader S&P 500 index followed shortly after, reaching a peak of 1,527.46 on 24 March 2000. Then, the mood in the markets shifted.
Two and a half years down
In the two and a half years that followed, prices fell sharply. Both indexes hit their low points on 9 October 2002. The Nasdaq had dropped by 77.9% from its peak, closing at 1,114.11. The S&P 500 fell to 776.76, a drop of 49.1%.
| Metric | Nasdaq Composite | S&P 500 |
|---|---|---|
| Peak (close) | 5,048.62 on 10 March 2000 | 1,527.46 on 24 March 2000 |
| Low (close) | 1,114.11 on 9 October 2002 | 776.76 on 9 October 2002 |
| Fall | −77.9% | −49.1% |
| Back above the 2000 close | 23 April 2015 (5,056.06) | 30 May 2007 (1,530.23); below again after 2008, above it for good from 2013 |
During these years, the paper value of investments in these indexes dropped significantly. Past performance is no guarantee of future results.
The long way back
A long recovery started from the low point in late 2002. It took years for prices to close above their March 2000 peaks again. For the S&P 500, this happened on 30 May 2007 (with a close of 1,530.23). Following a new crisis in 2008, the index fell back below that mark, eventually staying above it from 2013 onwards.
For the Nasdaq, the wait was much longer. It was not until 23 April 2015, over fifteen years after the peak, that the index broke through the old top with a closing level of 5,056.06.
These milestones are based on the price index, without factoring in dividends. If dividends had been reinvested, the wait would have been shorter.
Why losing half takes a doubling to recover
Recovering from a fall always requires a larger percentage gain than the original drop. If an amount of €100 drops by 50% to €50, it takes a 100% gain to get back to €100.
For the S&P 500, the math after the drop was as follows: the peak of 1,527.46 divided by the low of 776.76 is 1.97. From its lowest point, the index needed a gain of about 97% to recover.
The Nasdaq faced an even steeper climb. The top of 5,048.62 divided by the bottom of 1,114.11 is 4.53. To make up for that loss, it required a gain of about 353% from the low point.
What continuing to invest did and did not do
People who used regular investing experienced this period differently. Those who kept investing bought part of their units at lower prices. Because a fixed monthly amount buys more units at the bottom than at the top, the average purchase price came down during these years.
However, this did not prevent portfolios from showing paper losses for a long time. The exact final outcome after the bubble depended heavily on when someone started, their investment horizon, and how their monthly contributions compared to the money they had already invested.
What history does not tell
These figures describe one specific period in one market. History shows here that spread across many companies and countries mattered. An index spread across multiple sectors, like the S&P 500, fell less sharply than the tech-heavy index. A global index like the FTSE All-World spreads an investment even further.
Both indexes eventually moved back above their 2000 peaks, but that says nothing certain about the future. These figures offer no parallel with current markets or sectors. Past performance is no guarantee of future results.
What the calculator cannot do
Stazora’s ETF calculator shows how compound growth and compound returns work. The ETF calculator uses a constant yearly return. It cannot show a crash, ups and downs, or the order of good and bad years. You can read more about these limitations under assumptions and limits. Past performance is no guarantee of future results.
Sources
- Nasdaq Composite closing levels: Nasdaq, Inc., via FRED, Federal Reserve Bank of St. Louis, checked 2 October 2026.
- S&P 500 closing levels: S&P Dow Jones Indices, as recorded in CNBC’s index milestone record, checked 2 October 2026. Closing levels only, without dividends.