Market correction
In stock markets, a market correction is a 10% drop in the value of a stock index.[1][2] Corrections end once stocks attain new highs.[3] Stock market corrections are typically measured retrospectively from recent highs to their lowest closing price. The recovery period can be measured from the lowest closing price to new highs, to recovery.[4] Gains of 10% from the low is an alternative definition of the exit of a correction.[citation needed]
A sustained drop of 20% is not a correction, but a bear market.
A correction may also be a drop in a commodity price, as in the 2000s United States housing market correction.
References
[edit]- ^ Hicks, Coryanne (2018-02-05). "What Is a Stock Market Correction?". U.S. News. Retrieved 2020-03-18.
- ^ "What Is a Stock Market Correction?". The New York Times. 2020-02-27. ISSN 0362-4331. Retrieved 2020-03-18.
- ^ DeCambre, Mark. "Stop saying the Dow is moving in and out of correction! That is not how stock-market moves work". MarketWatch. Retrieved 2020-03-18.
- ^ "Stock Market Corrections: Not As Scary As You Think". Wealthfront Blog. 2018-05-11. Retrieved 2020-03-18.
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