Stock market corrections are a fact of life if you invest. And they can be pretty scary. More specifically, market corrections are when a major stock index suddenly plummets more than 10% from its most recent high.
Long-term investors, especially those with high-quality stocks in their portfolios, can usually wait out a correction. Even if you do some selling, the most important thing to remember is: Don’t Panic! It’s very possible you could miss out on major gains if you preemptively sell stocks whenever market corrections threaten.
For that matter, some very successful investors suggest that you hold your stocks during periods of market volatility so that you can reap the eventual rewards of increasing stock prices.
But let’s talk about buying during market corrections. When shareholders panic and sell, portfolio managers are forced to sell their cream-of-the-crop stocks based on the panicked behavior of uninformed investors. That’s why stock prices of good companies fall during market downturns.
That’s also why those stocks’ prices can rapidly rebound. Investment professionals know which stocks are excellent bargains after the market falls. They have their shopping lists ready, as you should! And you can look forward to buying shares of your favorite stocks after they’ve fallen.
The caveat is that you can’t just buy any random stock and expect that stock to rise with the eventual rebound in the broader market. There’s an art to successfully buying low among stocks, and one key facet of that decision is sticking with stocks that fell, but didn’t plummet. In that light, look for stocks that fall 10%-15% during a stock market correction.
Remember, too, that if you seriously expect to own a stock for just a few days or weeks, you’re not an investor, you’re a gambler. Investors should have a several-year timeframe with no immediate need to spend their invested capital.
To learn more, download our free report, 10 Forever Stocks to Buy Now–and How to Find the Best Growth Stocks.
With the Dow hitting another new high but the growth-focused Nasdaq Composite still unable to get above its February peak, we remain in a bull market that is challenging for growth investors; in fact, many recent great earnings reports have been met with instead...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
If you know how to find small-cap stocks, you can consistently unlock better-than-average market returns. These five steps will help you find the right small caps.
Read More
Back in the Soup
During the past month, the way we thought about what was going on was that growth stocks had finally put themselves into a position to get going after a two and a half month stretch of tough, choppy trading. Instead narrow,...
Read More
Things are still great. The market indexes are either making new all-time highs or within a whisker of them. The uptrend continues ahead of what is sure to be a booming economy in the months ahead.
Read More
May hasn’t started out exuberantly, with an early pull-back in the high-momentum tech stocks dragging down the broader indexes.
Read More
With the S&P 500 and Nasdaq Composite hitting new highs just last week, there’s no question that we remain in a bull market, and thus there’s no question that we should remain heavily invested.
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
The market just keeps marching higher despite increasing skepticism.
Read More
When looking at an investment idea, investors may want to replicate this intake process, tweaked of course for a clearly different (and less urgent) task. By using a consistent process, regardless of whether the idea comes from a friend, that off-beat relative, an broker...
Read More
The bull market is alive and well, though divergences and rotation continue to add a challenge to the process of identifying the market’s leaders.
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
Seeing More Setups, but Still in the Spin Cycle
Two-plus months ago, speculation was running rampant and most growth stocks had made giant moves over the prior six to nine months. So when the sellers finally stepped up and cracked the intermediate-term uptrend in growth...
Read More
The market still looks strong. But it’s getting a little harder to figure out.
Read More
Proxy season is moving into full gear. As a shareholder, you are one of the owners of your companies, so you get to vote on major decisions. Shareholder votes are, of course, much like public government elections, but in most cases your vote a..
Read More
The bull market rolls on—but it’s not a perfect bull market. In fact, it’s showing signs of age, with divergences and rotations that alternately reward and retard various sectors from time to time.
Read More
Stock Recommendation Tracker
The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More
