What you should know about market corrections
Editor’s note: This is the first of a two-part article about market cycles. The second part will run July 8.
There is no way around it — markets generally move in cycles!
Although the past is no guarantee of the future, historically, the stock market has spent more time on bullish advances than on bearish retreats — which is why stocks have been considered a good investment over the years — the market also tends to retrench more than the average investor would like to think about. The traditional definition of a bear market is a 20 percent or greater decline in stock prices as measured by the Dow Jones Industrial Average or other relevant index. A full-fledged bear market can persist for many months or, in rare cases, years.