Last week I was listening to the business update on the local AM news station and the host was going and on and on about the NASDAQ hitting 3000 for the first time in over 10 years. It brought me back to the heady days of the dot.com boom in the late 90’s right into 2000. As a skeptical investor I always like to peel back a few layers and understood what is underneath the surface of a statement.

So what is the Nasdaq Index made of? Companies of course, but which stocks? The 5 companies below make up almost 26% of the index and will therefore be a large factor on whether the index goes up or down.

Apple = 9.28% of the Index

Microsoft = 5.51

Oracle = 4.09

Google = 3.72

Intel = 3.18

I know that Apple has been on a tremendous run and I own many of their products in my household. Tremendous engineering, intuitive functionality, great service and one of the best business comeback stories of this generation..…but…

At over 9% of the NASDAQ index, Apple’s daily moves will most certainly have a significant impact on the level of the NASDAQ. Maybe this is not news to most investors, but just as trees cannot grow to the stars, earnings and stock prices cannot constantly go up.  Index investing can be a great low cost way to invest, but be aware of what you are buying and realize much of the recent gains in the NASDAQ are related to the elation surrounding Apple.

Caveat emptor!