Intro To The U.S. Stock Market For Beginners

Stock Market Crash vs. Correction

When there is a stock market drop of 10% or above,  what happens is called “a stock market correction.” However, a stock market crash occurred suddenly, like the 1987 crash when stocks dropped by 23% in a day.

If you’re worried that the stock market will crash, focus on the long term. While crashes can cause a bear market, remember that bull markets last longer than bear markets. This means that the stocks will eventually regain value.

Watching your portfolio’s value shrink in real-time and doing nothing about it can be challenging when the stock market falls. However, if you’re investing long-term, doing nothing is often the best course. If you’re thinking about why you should wait years for your stocks to regain value, remember that you lock in your losses when you sell investments in a downturn.

If you choose to exit the market and re-enter at a better time, you might worry about your potential gains or losses. Therefore, to avoid regrets and conservativeness, it is better to stay.