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Username: Andrew

Rating:
Guru Stars

Asked to: Dara Madee

Date Created: 25 Oct 2018
Category 28
Tag Financial
Question What is a 'Correction'?
Advice from Guru
Hello Andrew,

A correction is a movement, almost always temporary and happening in reverse, that accounts for at least a 10 percent adjustment to fix the overvaluation of a stock, bond, commodity or index.

A correction can usually be predicted during an analysis, and by comparing one market index to a similar market index. Using this method, an analyst may discover that an underperforming index will be followed closely by a similar index that is also underperforming. A steady trend of these similarly slowing indexes may be a sign that a market correction is coming.

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