The stock markets are currently on track to enter a correction stage, and we outlined these differences in a previous blog in October of 2018 – Pullback, Corrections, and Bear Markets – What’s the Difference? https://wealthanalytics.com/pullbacks-corrections-bear-markets-whats-difference/
Going back to the SARS virus back in 2003, the S&P 500 index fell 12.8%. During the Zika virus at the end of 2015 and into 2016, the market dropped by 12.9%. These are examples of corrections, and from there markets recovered. Each and every year the market cycles through one of these three stages, quite often multiple times in a given year. Knowing about these differences is important.
The coronavirus is a human tragedy and we don’t want to remove that from it’s context. We do want long term investors to better understand the market cycles given around any global or domestic event.