BERLIN -- It's been quite a couple of years for the

Neuer Markt

. Having just celebrated its third anniversary on Friday, the German equivalent of the

Nasdaq

has established itself as a crucial part of the country's blossoming equity culture.

This tech-oriented segment of the

Frankfurt Stock Exchange

has offered scores of new companies access to start-up capital and, at the same time, has provided soaring returns for legions of new German investors. The market, however, also has acquired a gold rush feel that marks a significant departure from the more conservative and worried tenor it had just 12 months ago.

Then, the Neuer Markt was about to enter its first big consolidation phase and would lose roughly 20% in a little more than three months. The drop didn't last long and shortly thereafter, the index more than doubled in value as investors got enshrouded in a speculative miasma. Since the start of the year, the Neuer Markt's general index, the

Nemax All Share

index, has gained around 70%, compared with only 24.1% for the Nasdaq.

But instead of causing fears of an impending crash, many investors expect the expansion to take only a brief breather, long enough for another lung full of the intoxicating vapor. Having gone from 4000 in less than six months to close at 8522 on Friday, the current vertiginous heights certainly have "correction" written all over them. Indeed, some analysts figure shaving off 20% or so might be the only sane thing to do at the moment.

"I certainly can imagine things might become a little more turbulent in the coming months," says Thomas Teetz, an equity strategist for

HSBC Trinkaus Capital Management

in Dusseldorf. "But even if you lost 20%, the market has gained so much recently, it wouldn't be the end of the world."

Probably not, but it certainly could adversely affect some funds that concentrate on the Neuer Markt, such as

TST Recommends

Invesco's Neuer Markt

fund or

Bank Julius Baer's Multistock Special German Stock

fund. And the consolidation already may be on its way: Monday, the Nemax All Share fell 5% as a broad technology selloff started in Asia and spread around the globe. Whether the negative sentiment will take hold and produce the anticipated slide remains to be seen, but even last year's bull run wasn't without its losers.

Whereas once a Neuer Markt listing seemed to be a license for a company to print money, the equity wheat is now being separated from the chaff. A glut of issues has caused investors to become more selective, leading to quite a few IPO flops.

Certainly fewer companies have had the success of listings such as

Pixelpark

, the Berlin-based multimedia firm partly owned by

Bertelsmann

. Listing back in October for a mere 19 euros ($18.31) per share, Pixelpark closed Monday at 166 euros.

But even if every company can't be a Pixelpark, Germany's rebounding economy and its catch-up potential in all things Internet has many investors excited about quite a few of the company's soon-to-be Neuer Markt brethren. Next up to bat is the portal

Lycos Europe

, a Bertelsmann-

Lycos

(LCOS)

venture, which is expected to start trading on March 22 for a price between 19 and 24 euros per share.

And that ever more companies are attempting to list on the Neuer Markt could be indicative of its future prospects. Despite the sense of vertigo the market's present levels may give to some, it appears the majority of investors are expecting to celebrate the Neuer Markt's fourth anniversary with cheers rather than tears.