Investor Glossary-correctionInvestor Glossary-correctionInvestor Glossary-correctionInvestor Glossary-correctionInsightful stock market charts - Click here
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


The HTML to link to this page

A market correction is a decline in price following an extended rise in price. Unlike a market crash, a correction involves a relatively small percentage decline that occurs gradually rather than precipitously. After a correction, markets often consolidate in a narrow trading range before moving upwards. In bull markets, corrections are viewed as a healthy repricing of stocks. Investors often use corrections as an opportunity to enter at more favorable prices. Many market timers use indicators and technical analysis to try and determine when a correction is likely to begin and end. The practice of going long during corrections is sometimes referred to as "Buying the Dip". Since crashes usually start out looking like corrections, going long during a correction carries risk.

Rate this correction definition...

Learn about investing with the Investor Glossary Term of the Day

Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.

Popular Terms: APR, required rate of return, in escrow, per diem, stock split, cancelled check, labor relations, liquidity ratio, inflation, 401a, limit order, risk management, Key Rate Duration, retained earnings, FICO score, quality assurance, 144a, real GDP, command economy, dividends payable, deferred revenue, class C shares, stock market close, deferred tax, balance sheet, reverse mortgage, phantom income, ex-dividend, option premium, LIBOR, annual return, debt service coverage, open position, 1035 exchange, current ratio, EBITDA, implied volatility, average price per share, wholly-owned subsidiary, Zero Cost Collar, irrevocable trust, ex-dividend date, FTSE, diluted share, covered put, minority interest, VIX, 1031 exchange, margin rate

Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use