The theme this week on the Retirement Quick Tips Podcast is: Stock Market Correction Is Here…What To Do Now

Today, we’re building the foundation by understanding market corrections…what are they? What does a typical market correction look like? And how long do they last?

• Correction = 10% or more drop in price of the stock market
• If the correction crosses over the 20% decline threshold, it becomes a bear market. Bear markets are usually longer, and more painful and are often accompanied by a recession as well
• A typical market correction occurs every couple years. The most important point I want to cover today with market corrections is to help you see that they are normal, healthy, and fairly frequent.
• Sometimes the stock market gets too hot - prices rise too much too fast and stocks can easily become overvalued. Corrections serve to bring stock prices back down to reality, so they are a normal and healthy part of investing.
• A stock market correction can last a few days, weeks, or months, and since WWII, the average correction lasted 4 months, which is actually the time it took for the correction to fully reverse and return to the previous high water mark before the correction began.

Tomorrow I’ll talk more about whether this current correction is likely just a healthy, short-lived correction, or the beginning of worse to come.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance