How to Cope With a Prolonged Stock Market Correction
Earlier this year, stocks dipped into correction territory after two strong years of gains. A correction occurs when stock values drop at least 10% but less than 20% from a recent high. Once stock values plunge 20%, we enter into bear market territory.
The good news is that stock market corrections tend to be fairly short-lived. In fact, historically, it tends to take the stock market about four months to recover from a correction.
But what if we're in for a more prolonged window of pain? Tensions overseas, economic woes, and lingering pandemic fears could all contribute to an extended period of lower stock values. Let's also not forget that the prior two years saw massive stock market gains, so it may take time for stocks to return to pre-correction levels this time around.
Source Fool.com
