Nasdaq Correction (-10%)
Technology sector corrections
Nasdaq corrections occur more frequently than S&P 500 corrections because technology is structurally higher-beta (beta ~1.2 to S&P 500). Forward returns have typically been strong, though recovery variance is wider than the broad market.
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 1971-11-23 | +11.7% | +28.9% | +13.0% |
| 1973-02-23 | -2.9% | -15.7% | -22.3% |
| 1975-08-13 | -3.1% | +21.0% | +43.4% |
| 1978-10-20 | -2.8% | +3.7% | +73.4% |
| 1979-10-19 | +2.6% | +29.4% | +61.6% |
| 1981-08-24 | -7.8% | -7.5% | +97.1% |
| 1982-09-07 | +3.8% | +36.0% | +171.7% |
| 1983-08-08 | +5.5% | +2.1% | +70.9% |
| 1985-10-08 | +6.0% | +28.9% | +73.3% |
| 1986-08-04 | +6.0% | +34.6% | +62.4% |
| 1987-10-16 | -12.7% | -2.5% | +42.4% |
| 1989-12-18 | -1.6% |
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
The Nasdaq corrects 10% roughly 1.5x per year vs. 1x for the S&P 500. But median recovery time is similar (~4 months) because the same beta that drives the decline drives the recovery.
The top 7 stocks in the Nasdaq-100 represent ~50% of the index. A single earnings miss (e.g., NVDA, AAPL) can trigger a -5% index move overnight.
Clients who maintained their tech allocation through 2022's -33% Nasdaq decline fully recovered by 2024. Those who panicked out permanently locked in losses.
Since tech corrections arrive roughly half again as often as broad-market ones, size the technology sleeve so a routine -10% never forces a sale. While you're there, audit the overlap between large single-stock positions and the index's top names — owning the same mega-caps directly and through the index means carrying the risk twice.