If the stock market feels too good to be true right now, that’s because it might be—history suggests we’re overdue for a reality check. This may not be true for every stock, but it's certainly true for the major US indexes (DJIA, S&P 500 and NQ 100), each of which has been sitting at all time highs in recent days. Let's take a look at the high-flying Nasdaq 100 for instance, as represented by the Invesco QQQ ETF. If we compare this current run up to the top returning 1-3 year periods for the QQQ, we find ourselves sitting atop the #4 highest return on record at a scorching 124%. The only periods higher?
- The post-covid rally, leading into 2022 inflation induced bear market
- The stimulus led rally following the 2008 housing crisis
- The dot com bubble leading into 2000
So how did things go for the Nasdaq 100 following those massive runs? Not so great, as can be seen in the chart below.
The MAGA AI Bubble