End of a Fad
Chart of the Week for July 28-August 3, 2000
Like all fads eventually do, the Internet fad has come to a quick end. Investors who were in early and got out near the peak were richly rewarded. Those late to the party suffered large drops. Since the turning point on March 9 of this year, the Dow Jones Internet Index is down nearly 50% through midday on Friday, July 28.
The broad negative performance of Index members confirms that the fad is now broken. Of the 40 members of the Index, only eight have positive year-to-date returns. Of the 32 with negative returns YTD, 31 are down at least 25% and a handful are down more than 70%.
Rather than chasing returns in hotshot industries or securities, prudent investorsbase decisions on their personal investment goals, time horizon, and tolerance for risk using a long-term plan.
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