How Long Do Stock Market Corrections Last?

Hi, friends.  A short post this evening, as we in the U.S. ease into the Thanksgiving holiday…

So…corrections.  What are they?  Are we in the midst of one?  How long do they last?

The definition of a correction is when a stock market average drops by 10% from its high.

Currently the Dow is down around 7%, the S&P 500 is down 8.5%, and the NASDAQ is down 13%.  So yes – we are in what can be termed a correction.

How long can we expect this downturn to last?  It’s impossible to know for sure, but if history is our guide, the typical correction lasts three to four months.  When you consider that the market peaked in late August, we will probably be in sell mode for the rest of the year.

Stay the course.  Buy and hold.  You’ll be glad you did!

I wish all of those celebrating a happy and safe Thanksgiving Day!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

 

If You Own High Beta Stocks, Don’t Panic!

Good morning!

I want to take a short minute to talk about high beta stocks.

A high beta stock is one that has more volatility than the general market.  If the general market has a beta of 1, then a high beta stock would have a beta greater than 1.

High beta stocks will usually have moves much more severe than the overall market – both upward and downward.  For example, while NASDAQ is down about 11.5% from its all time highs, Nvidia (NASDAQ: NVDA) is down over 30% from its all time high.

Owning high beta stocks can make it feel like the market is doing much worse than it is.  But this is the nature of how these stocks trade.  So hold on and don’t panic!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *