You Can't Control Market Corrections, but You Can Control What You Do About Them
The markets have rebounded in 2023, remaining resilient despite high inflation, elevated interest rates, bank failures, and a tepid economy. The S 500 is up about 16% year to date (YTD), while the Nasdaq Composite has gained around 33%.
Most predictions have been off this year, as many were calling for a recession and a flat stock market. Where it goes from here is anyone's guess, but the potential is always there for a market correction. Fortunately, there are some bedrock principles you can follow that can guide you through whatever short-term volatility comes at you -- including another market correction.
You've probably heard the terms correction, crash, and bear market thrown around, and all indicate a declining stock market. A correction is a slump of at least 10% and less than 20% over any given time period. A crash is typically an abrupt and dramatic drop, usually more than 10%, but happens over a very short period, while a bear market -- like we saw in 2022 -- is a decline of more than 20% that lasts several months or longer.
Source Fool.com