Compilation of information about stock market corrections.
A Field Guide to Stock Market Corrections, Joshua Brown {
- 10% drop is a correction, 20% bear market, 50% crash, 80% depression.
- Since the end of World War II (1945), there have been 27 corrections of 10% or more, versus only 12 full-blown bear markets (with losses of 20% +).
- The average decline during these 27 episodes has been 13.3% and they’ve taken an average of 71 days to play out (just over three months).
- From the beginning of the secular bull market in 1982 through the 1987 crash, there was just one correction of 10% or more. Between the Crash of 1987 and the secular bull market’s peak in March 2000, there were just two corrections, according to Ed Yardeni.
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As of August 2015, the current bull market is about 6 years old. The last time we had such a long stretch was the 5 year run-up to the 1987 crash.
Google Finance graph of 1987 crash
The current correction started July 20, 2015 and is 35 days old as of August 24, 2015.
The CNN Fear & Greed Index is scoring 13/100 (heightened fear) as of August 28th, 2015.
