Correction

A correction means a significant decline in market prices, often around 10% or more from a recent high. In simple terms, a correction happens when prices fall enough to show that the market is adjusting after rising too much or too quickly. Corrections are important because they can reduce overvaluation, reset investor expectations, and test market confidence. They are common in financial markets and do not always mean a recession or bear market is coming. For example, if the S&P 500 falls 10% from its recent high, investors may call it a market correction. A correction is not the same as a pullback. A pullback is usually a smaller, short-term decline within an ongoing trend, while a correction is deeper and suggests a more meaningful market adjustment.