Cheap Stocks Are Lurking Everywhere -- Don't Fall Into Their Trap
At the beginning of the COVID-19 pandemic in early 2020, the stock market plunged. All three major indexes -- the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average -- fell 30%, 29%, and 34%, respectively, from mid-February to mid-March 2020. However, from then until the end of 2021, the stock market rallied and put on an impressive bull run. The S&P 500 increased 106%, the Nasdaq Composite increased 127%, and the Dow Jones increased 89%.
But then 2022 came, and reality in the form of a stock market correction hit. A stock market correction occurs when major indexes drop 10% to 20% (over 20% is considered a bear market). Although nobody likes seeing their portfolio value drop, stock market corrections can sometimes be good for long-term investors because great companies trade at lower prices.
However, investors need to look out for one thing during these times: value in disguise.
Source Fool.com
