They eagerly snapped up shares recommended by City analysts and tipsters, only to watch markets plummet and their money disappear.
Some pundits now blame city analysts - who advise customers on investment choices - for getting their forecasts wrong.
Cynics argue that analysts are afraid of advising customers to sell a company's shares, in case they alienate the company in question.
In particular, Wall Street's research analysts are facing heavy criticism for sticking doggedly to recommendations to buy or hold shares, whose price is falling.
One of the examples cited is that of US technology firm Rhythms NetConnections.
Wall Street analysts were still telling people to buy their shares even when the share price had fallen to under $3 from a previous peak of more than $93.13 in April 1999.
And in the example of internet retailer eToys, many analysts were oblivious to the company's problems until it issued a profits warning in December.
At that point, many analysts changed their rating from buy to sell, but it was too late for most shareholders which had already borne the brunt of the losses from a peak of more than $80 in October 1999 to Wednesday's price of just $0.03.
'Sophisticated'
Analysts argue that most investors are sophisticated enough to read between the lines of their recommendations.
"Most people who have been in the market for a while understand that when a brokerage goes to a 'hold' from a 'buy', then 'hold' really does mean 'sell'," Barry Hyman, a New York stockbroker with Weatherly International told BBC Radio 4's Today programme.
"People do understand that, and the quicker everyone else understands that the better," added Hyman.
But Hyman did admit that there was clearly a mistake in some analysts' research last year.
Hyman attributed the mistake to the fact that analysts, like many others, were caught up in the hype surrounding new economy companies.
Rather than assessing a company's worth by looking at its existing income, they got swept away by hopes of future profits.
Some analysts counted the number of visits to a website as a positive factor, rather than assessing the amount of money generated from that visit, an article in the New York Times claimed.
The problem so far appears to have been largely confined to the US.
In the UK, city analysts altered their positions earlier to more accurately reflect the bearish feel of the markets.
And the Swiss-based bank UBS Warburg was one of the first banks to take a publicly negative stance on dot.com stocks, recommending that investors sell-out from falling stocks, such as Freeserve, as early as June.
Conflict of interests
Other market-watchers say that the reluctance of Wall Street's analyst to recommend shares be sold is a political move.
A city analyst's recommendation to sell shares in any particular company can be devastating to the relationship that bank holds with that company.
These companies are potential or existing clients for a bank.
A bank could take a cut of any deal, share issue or bond issue it advises this company on.
Traditionally, investors look to analysts for advice because they believe they know more, not just about the markets, but also about the company.
But the law courts passed legislation this year that has blunted the cutting edge of Wall Street analysts.
Regulations introduced by the US' Securities and Exchange Commission in October prohibit a company from disclosing performance-related information to an analyst without disclosing the same information publicly.
"This means that analysts are no longer one step ahead of the game," explains ABN Amro's Kevin Silverman to BBC News Online.