Frequency of Stock Market Corrections
Written on January 20, 2016
JEFFREY GRENCHIK

Frequency of Stock Market Corrections


Stock market corrections should not come as a surprise. Corrections are 10% drops from a market high (bear markets are 20% drops).

Since 1900, corrections have occurred once per year on average (Source: Capital Resource and Management Company). As the chart illustrates, there were 3 (nearly 4) corrections from 2010 to last August. We are now in the fourth.

As you can see, however, the trend line is up, despite numerous corrections. This is a normal part of stock market investing.


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