Pullbacks, Corrections, and Bear Markets
What’s the difference? What do these terms mean for you? May 8, 2020 The COVID-19 outbreak has put tremendous pressure on stock prices, prompting some investors to blindly and indiscriminately sell positions at a time when the entire market is trending lower. Worried investors believe “this time it’s different.” When the market drops, some investors lose perspective that downtrends – and uptrends – are part of the investing cycle. When stock prices break lower, it’s a good time to review common terms that are used to describe the market’s downward momentum.1,2 Pullbacks. A pullback represents the mildest form of a