Market Correction: What It Means and How Investors Should Respond

*Market Correction: What It Means and How Investors Should Respond*

A market correction is a short-term decline in stock prices, typically defined as a drop of 10% or more from recent highs. Corrections are a natural part of market cycles and often occur after periods of rapid gains, serving as a healthy way to “reset” valuations.

While a correction might feel alarming, it is usually not a sign of a prolonged bear market. Instead, it reflects investors adjusting their expectations based on new economic data, earnings reports, or geopolitical events. Corrections can help prevent bubbles by bringing asset prices back in line with fundamentals.

For investors, market corrections offer an opportunity to reassess portfolios, rebalance assets, and consider buying quality stocks at discounted prices. Rather than panic selling, maintaining a long-term perspective and staying disciplined during corrections often leads to better financial outcomes.

Understanding market corrections as normal market behavior helps investors stay calm and make informed decisions in volatile times.