Why a 22% Gain in Tech Isn’t a Bubble — It’s Just the Beginning

Good afternoon, friends.Let’s start with a number: 22%. That’s roughly what the Nasdaq has returned since July 11, 2024 — about 16 months, or 1.33 years.Impressive? Sure. But not excessive. The Nasdaq’s long-term average annualized return sits around 10–11%, and this period clocks in near 15–16% annualized — slightly above average, but nowhere near bubble territory. For perspective, during the 1990s bull market, similar stretches routinely delivered 30–50%+ annualized gains.So even with all the buzz around AI, this rally remains remarkably normal — and that’s exactly why it’s so promising.

1. The Boring Stuff Did Great — The Innovative Stuff Changed Lives

During the best years of the 1990s, “boring” worked just fine. A $10,000 investment in Procter & Gamble in 1995 grew to roughly $35,000 by 1999. Johnson & Johnson followed a similar path. That’s a solid return by any measure.But now look at the innovators. That same $10,000 invested in Cisco Systems in 1995 was worth roughly $275,000 just five years later. Microsoft delivered multiple years of 100%+ gains over that same period.The takeaway is simple: both sides made money — but the majority of the wealth creation flowed to where the innovation was happening.

2. Where the Money Flows

There’s a lot of money in the system — pension funds, mutual funds, corporate cash, sovereign wealth, private capital. But even with trillions circulating, that capital isn’t infinite. It chases growth.During periods of major innovation, whether it’s the internet in the 1990s or AI today, the flow of capital becomes concentrated. It moves toward the sectors and companies driving change — the ones expanding the economy’s boundaries, not just maintaining them.That’s not greed; it’s gravity.

3. The AI Parallel

Fast forward to today. The headlines, the volatility, the endless AI debates — all of it feels eerily familiar to the mid-90s.We’re seeing the early innings of another multi-year expansion, but this time the driver isn’t the internet — it’s artificial intelligence. And just like back then, the biggest returns won’t come from owning everything equally. They’ll come from owning the right things — the companies creating the growth, not just benefiting from it.

4. Conviction Wins

If your investment approach sounds like “we’re invested for the long term,” that may help you stay the course, but it won’t help you maximize what’s possible.Conviction — backed by data, timing, and execution — is what turns opportunity into outperformance. It’s not about timing the market. It’s about aligning with where the market’s momentum, innovation, and capital are headed.

5. The Bottom Line

The last 16 months have been steady, not speculative. We’re just getting back to trend. And if history’s any guide, we may only be in the first act of something much bigger.Boring will still make you money. But conviction — positioned where the innovation is happening — is how real wealth gets created.