As everyone see many ups and down in their life, in the same manner, stocks also face many ups and down. Everyone wants to see ups and ups in life and stocks too, but that’s not possible in any manner.
Stocks sometimes face a dip and this cause a good amount of stress in mind of investors. But for those who invest their money for long term don’t panic too much because they know that ups and down are the parts of stocks.
If you are part of the smart financial planning, then you must know the difference between a stock market correction and a bear market correction.
What’s a Bear Market?
Few things must be happen to change the stock market into the bear market. The value of broad equality index must be drop by minimum of 20 percent, this is the first thing to be happen
The second thing to occur the bear market is the downturn in value must be continue for minimum of two months.
What’s a Correction?
A correction is way for stock market to correct itself. Initially, it hurt the investors but it worth hundreds. The thing you must have patience and confident that everything will be settle down.
You will be surprise to know that correction happen due to fundamental rule: everything which acquires height, someday it will definitely come down. That’s why, corrections are considered as natural.
If you talk about stock correction 2018, then one company down to 6 percent from recent highs.
What to do during Correction?
There are two rules can be followed during correction:
- Doesn’t panic in a correction, keep patience, your investments will definitely bounce back gradually.
- Take advice from the financial planner and don’t take major decision without consulting them.
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