Channel3000.com
February 10, 2021 8:41 AM
Miranda Marquit - Forbes Advisor
Posted:
Updated:
February 11, 2021 6:36 PM
When markets keep rising steadily for an extended period, there comes a point when the talking heads on television start forecasting a correction.
What’s a correction? Nothing more than a moderate decline in the value of a stock market or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak. Corrections can happen to the S&P 500, a commodity index or even shares of your favorite tech company.
“Say the words market correction and many investors immediately think of a crash or a bear market, with the panic-inducing idea that they’ll be living on Ramen noodles through retirement,” says Joseph Hogue, chartered financial analyst (CFA) and a former Wall Street investment analyst. “In reality, stock market corrections happen relatively frequently, and they aren’t nearly as bad as you might think.”