Why Did the Market Drop So Much in January?

Sometimes it's pretty obvious why the stock market is falling. And when that's the case, it's actually a good scenario for investors. If you understand why stocks are dropping, you're likely to have a better idea about how to respond. For instance, in March 2020, we knew what was spooking investors -- the threat of COVID-19. Crashes are often accompanied by a surge in negative emotions. 

Nonetheless, if you keep your wits about you, sharp market downturns can be investing opportunities. After all, we all knew what companies might be best positioned to thrive during a serious outbreak of an infectious disease -- vaccine companies. At the start of 2020, I owned shares of Novavax (NASDAQ: NVAX). The whole rest of my portfolio was bleeding red ink -- except for that biotech company, which was spiking higher day after day. Novavax stock ran up 3,000% that year.

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Source Fool.com