Kiplinger

A Better Way to Tell a Correction from a Bear Market?

The standard definition of a correction is a 10% market decline, while a bear market is a 20% decline. These are simple definitions ... I take a different view.

At Cornerstone, we view a correction as a significant decline within an up trend. The key here is that the up trend continues after the correction is over. Two examples are the crash in 1987 and the correction of 1990. In both cases, the market fell 20% or more, yet they recovered quickly and the up trend continued.

As you can see in the chart

You're reading a preview, sign up to read more.

More from Kiplinger

Kiplinger4 min read
Stop 'Dollar-Cost Ravaging' Your Portfolio in Retirement
It's been more than seven years since Wade Pfau, one of the top experts in retirement research, wrote a column for MarketWatch urging readers to "Say Goodbye to the 4% Rule." In it, Pfau suggests that the "rule" -- which is more of a theory, really -
Kiplinger6 min read
Tax Planning Strategies for the 1% Are a Gamble
The Tax Cuts and Jobs Act of 2017 (TCJA) became law in 2018 and gave wealthy families a lot to celebrate. In addition to many tax reforms that benefit most taxpayers, the TCJA increased the federal estate and gift tax lifetime exclusion amount from $
Kiplinger9 min read
7 of Wall Street's Most Heavily Shorted Stocks
"Short interest" is one of the most interesting pieces of stock data that you might pay little or no attention to. But this little metric of negative sentiment, while popular among traders, can be valuable even to buy-and-hold investors who never wan