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market corrections Archives

What are Market Corrections?

Stock market corrections are an opportunity for investors to buy stocks while they’re on sale. But you can’t buy just any stocks.

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. 

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Cabot Dividend Investor Weekly Update

From the issue of |by Tom Hutchinson|Dividend Stocks

Earnings have been sensational. Reported earnings for S&P 500 companies have grown an average of 2% in the fourth quarter, compared to an expected -11%.
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Cabot Undervalued Stocks Advisor Weekly Update

February 24, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

The stock market is clearly accelerating the “reopening” trade. Small cap and cyclical stocks as well as commodity prices are surging, interest rates continue to tick up (the 10-year Treasury yield is now 1.38%, up from 0.92% at year-end), and novel financial vehicles SPACs,...
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Cabot Undervalued Stocks Advisor Special Bulletin

February 23, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

With the shares continuing to surge past our recently raised 65 price target, and now being priced at a premium to even our upgraded valuation metrics
Read More

Cabot Stock of the Week 336

From the Cabot Stock of the Week 336 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

With this week’s recommendation, I’m swinging back to the more conservative side with a solid technology company poised for big gains from the 5G communications rollout.
Read More

Cabot Prime Week Ending February 19, 2021

From the Cabot Prime Week Ending February 19, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

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...
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Cabot Prime Pro Week Ending February 19, 2021

From the Cabot Prime Pro Week Ending February 19, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

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...
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Cabot Dividend Investor Weekly Update

February 17, 2021|From Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

Earnings have been sensational. Reported earnings for S&P 500 companies have grown an average of 2% in the fourth quarter, compared to an expected -11%.
Read More

Cabot Undervalued Stocks Advisor Weekly Update

February 17, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

With the stock market regularly surging to record highs, it may seem like an unusual time to focus on valuation. After all, many stocks are remarkably expensive on traditional measures, and even somewhat lofty on non-traditional measures. But valuation still matters, especially if market...
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Cabot Stock of the Week 335

From the Cabot Stock of the Week 335 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

This week’s recommendation is a small company with no earnings, minimal revenues and a lot of competition.
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Cabot Prime Pro Week Ending February 12, 2021

From the Cabot Prime Pro Week Ending February 12, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

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...
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Cabot Prime Week Ending February 12, 2021

From the Cabot Prime Week Ending February 12, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

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...
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Cabot Growth Investor 1465

From the Cabot Growth Investor 1465 issue of Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Simply Put: Very Impressive Action Two weeks ago, the major indexes and some individual stocks began to flash abnormal action, a couple of key leaders were threatening to break down and some late-in-the-advance type of action (heavily shorted stocks going nuts) was occurring. Importantly, the...
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Cabot Undervalued Stocks Advisor Weekly Update

February 10, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

Last week, we outlined four ingredients of a market bubble that were usefully outlined in a recently published book1”and briefly described how it clearly appears that our stock market is in a bubble. These ingredients include easy trading of assets, cheap and easy rising...
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Cabot Stock of the Week 334

From the Cabot Stock of the Week 334 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

Today I’m swinging back to pure growth with a very interesting stock that has a great story—and no direct competition.
Read More

Cabot Prime Pro Week Ending February 5, 2021

From the Cabot Prime Pro Week Ending February 5, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

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...
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Cabot Prime Week Ending February 5, 2021

From the Cabot Prime Week Ending February 5, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

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...
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Cabot Dividend Investor Weekly Update

February 3, 2021|From Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

The fourth quarter earnings season is well under way and the results have been somewhat spectacular so far, and much better than expected.
Read More

Cabot Undervalued Stocks Advisor 221

From the Cabot Undervalued Stocks Advisor 221 issue of Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

With the now-infamous Reddit trades unraveling, and the rebalancing done, the market is free to rebound.
Read More

Cabot Stock of the Week 333

From the Cabot Stock of the Week 333 issue of Cabot Stock of the Week|by Timothy Lutts|Stock Market

The market’s main trend remains up, and thus I continue to recommend that you be heavily invested.
Read More

Cabot Prime Week Ending January 29, 2021

From the Cabot Prime Week Ending January 29, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

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...
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