Market corrections hurt. They can come out of nowhere. And when they do, they ignite fear, amplify worries, and set off alarm bells. It’s hard not to panic when that happens. And it’s tempting to react and want to pull back. Many people give in to that temptation. Informed investors don’t.
Why? Because they know most market corrections are short. In fact, over the past 70 years, corrections have been getting shorter and shorter. These days, the average correction is over within four months.
Those are just a couple of reasons why you shouldn’t panic over corrections.
If you know these facts about corrections, you can keep a level head and healthy perspective whenever the markets retreat. That can help you avoid overacting. It may even open your eyes to new opportunities.