Home > Investment Dictionary > Correction

Correction

A market correction is a temporary decline in the price of a financial market, stock, or index, usually by at least 10% from a recent peak.

 

Corrections are common and occur as part of normal market cycles.

 

They can be caused by economic concerns, changes in investor sentiment, geopolitical events, or market overvaluation.

 

While corrections may feel uncomfortable, they are often viewed as healthy adjustments within a longer-term market trend.