First: corrections are completely normal
A market correction — defined as a 10% or more drop from a recent high — has happened on average every 1.9 years since 1950. Bear markets (drops of 20%+) happen roughly every 3-4 years. These are features of markets, not bugs. The emotional experience of watching your portfolio drop feels catastrophic every time. The data says something different.
Important fact: Investors who stayed fully invested through every correction since 1980 dramatically outperformed those who tried to time the market and move to cash. Missing just the 10 best trading days in a 20-year period cuts returns nearly in half.
What to actually do during a correction
- Do nothing with your existing investments. Selling locks in losses permanently.
- Keep your automatic contributions running. Dollar cost averaging means you're buying more shares at lower prices — that's the strategy working correctly.
- Check your emergency fund. If you have 3-6 months of expenses in cash, you don't need to sell investments to cover life expenses.
- Consider buying more if you have cash available. Corrections are sales on stocks. The best investors view them as opportunities.
- Don't watch the news. Financial media is incentivized to make every drop feel like a crisis. It almost never is.
Historical context that helps
The S&P 500 has returned to new highs after every single correction in its history. Every one. The average recovery time from a correction is about 4 months. From a bear market, about 2 years. Long-term investors don't need to care about either timeline — because they're not selling.
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