NEW YORK (CNN/Money) - The Dow recently closed at a four-year low, while the Nasdaq closed at a six-year low. I can understand that the Nasdaq got ahead of itself a few years ago, but why has it corrected so much more than the Dow? What is different about these markets now than four years ago?

-- Barry, Camarillo, CA

Oh, I'd say the main difference between now and four years ago can be summed up in one little word: reality. Back in the late 1990s when the Nasdaq was racking up annual gains as high as 86 percent, investors were living in a fantasy land. They actually believed that big tech stocks in the Nasdaq composite could deliver annual earnings gains of 30 percent or more as far out into the future as the eye could see, maybe longer.

As a result, a very small group of tech stocks was driving the entire index. In 1999, for example, just 10 stocks -- Cisco Systems, Microsoft, Sun Microsystems, Intel, Oracle, Qualcomm, Nextel Communications, Applied Materials, MCI WorldCom and Amgen -- accounted for almost half the Nasdaq's gains.

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The Dow certainly got overheated too, but not nearly as much. That's because even though the Dow has its share of technology, with companies like Microsoft, Intel and IBM, it was still had a thin tether to reality in the form of its Old Economy stocks, like General Motors, McDonald's, Wal-Mart and Philip Morris.

Simply put, investors weren't as willing to suspend their disbelief about the future earnings for the Dow stocks as they were for the Nasdaq's tech shares. So while the Nasdaq shares became insanely overvalued relative to their earnings potential, the Dow became merely wildly overvalued.

Which means that when investors finally stepped back and realized what they were paying for stocks in the Nasdaq and Dow, the Nasdaq shares got punished a lot more, the stock market's version of the "harder the party, the bigger the hangover" theory.

Looking back, it's hard to explain how investors took leave of their senses so completely. Intellectually, we know that these sorts of things happen in markets. But when you try to explain them rationally, you're at a loss for words.

It's kind of like the Sixties. I know that at the time it seemed to make sense to go out in public wearing Nehru jackets and sprinkle your conversation with words like "groovy" and "bummer, man." (I live in dread that a photo of yours truly in his tie-dyed bell bottoms and buffalo fringe vest will someday surface.) But I'm hard pressed to explain why it made sense at the time.

Anyway, the big question now is what happens from here. I have complete faith that the markets will eventually recover and climb to new highs. And while I don't know exactly when that recovery will begin, I still believe now is an excellent time for long-term investors to buy stocks. (For more on why I believe that, click here.)

As to which stocks to buy, well, that's a decision you and other investors will have to make based on your assessment of their future prospects compared with their current prices. I suppose you could argue that since the Nasdaq fell so much harder than the Dow that it would also snap back more when things turn around.

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I'm not so sure. When I look at a lot of the Nasdaq companies that led the charge in the 1990s, I'm reminded of Gertrude Stein's famous line, "There is no there there," -- in this case the "there" being realistic revenue growth and earnings potential and other things true investors like to rely on to value a stock.

So I would expect the Dow and other indices like the S&P 500 to reclaim their peaks a lot faster than the Nasdaq. And I'm not alone. This summer, when MONEY Magazine held its first annual Money Summit in June to discuss America's financial future, we asked the assembled business leaders and political luminaries to predict how long it would take the Nasdaq to regain its previous high.

Nearly 60 percent thought it would take 11 or more years for Nasdaq to crack the 5000 level again. Only 17 percent thought it would happen within three to five years.

That's not to say that you can't find many Nasdaq stocks that are probably better buys than stocks on the Dow or other major indices. But I think we'll see the Dow and other major indexes regain their glory-day levels a lot sooner than the Nasdaq -- unless, of course, investors decide to take another trip to fantasy land.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He can be seen regularly Monday mornings at 8:40 am on CNNfn.