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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.
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.