Plain-English definitions, reviewed by an independent investor
Market Correction
A correction is a drop of 10%–20% from a recent high — a routine shakeout, milder than a bear.
A correction is a drop of 10%–20% from a recent high — a routine shakeout, milder than a bear.
(Defined by a 10%–20% pullback)
Why it matters
It is the market’s normal exhale after a run.
Common confusion
It can deepen into a bear; the label is only clear in hindsight.
Frequently Asked Questions
Correction vs crash?
A crash is a sudden, sharp drop; a correction is a milder 10–20% pullback.
Should I sell?
Many long-term holders do nothing; corrections are common and recover.