Buying at the Peak : A Bad Decision

If you had invested $100 in the Nasdaq at its March 10, 2000 peak of 5132.52, your investment was worth $43.12 as of the December 28, 2004.

The following chart shows the current value of the $100 investment for each daily close from March 10, 2000 through December 28, 2004. The lowest value of the investment was $21.71 on October 9, 2002.

Investing at the peak means big losses for a post-peak prolonged downside. Before you buy, always check the price-to-earnings ratio of the index or stock. Beware of a relatively high P/E, particularly if prices have been on the upside for a long time.