A <a t think a correction — a decline of at least 10% — is imminent. It could occur, yet currently the economy appears robust and the market has absorbed the surge in energy costs caused by the ongoing Persian Gulf conflict. Plus, calling market tops and bottoms is a mug's game. And one I'm not interested in.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. After years of silence, the identical “Total Conviction” signal is now appearing for a firm that is one‑hundredth the size of Nvidia.
Nevertheless, a correction is bound to happen at some point. And it will be caused by geopolitical tensions, spiking oil prices, stock overvaluations, rising interest rates, spiking bond yields, disappointing economic data or corporate inflation… or a combination of several of these.
Because they can be caused by so many things, corrections are relatively common. Historically, they surface roughly every 2.2 years. And the average market decline is 21% (including bear markets, defined as corrections of more than 20%). In fact, there was a market correction just last year, after the Trump administration announced tariffs on U.S. trading partners, which the president called “Liberation Day.” There was a correction in 2022 that was due to aggressive rate hikes by the Federal Reserve in response to spiking inflation.
Here’s the good news for investors. Following each of those downturns, the U.S. stock market rebounded and reached fresh record levels. And most corrections don’t last very long. The average length is about 115 days
