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Scenario 4
In the late 1990’s into 2000 there was a rapid rise in US technology stock equity and major investments in internet and dot com related companies. The NASDAQ index grew over this time from 1,000 to 5,000 points as investors speculated on these tech stocks; and the projected profits and company valuations grew.
Ben’s brother lived in the US and kept telling Ben that these stocks were the next best thing and that everyone was investing. He repeatedly told Ben that if he left it too late, he would miss out. Ben was generally a conservative investor, however, he wanted to get in early and not miss the gains that were on offer. He quickly invested in three tech stocks, based on his brother's advice and what other investors were doing. In 2001, the bubble burst where a significant number of investors lost most of the value of these tech stocks with only a few major tech companies surviving the crash. Unfortunately, Ben’s selected stocks did not survive the crash.
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