CORRECTION IDEAS

There is a common rule on the floor that each year needs to come a correction which must be bigger than 10%. The two digit drop has not came yet this year. Let’s take a closer look what means a correction on the markets.

In the matrix by Big Bicture, you can see the corrections are always with us. This is the part of the investment business. The size might be different. This year on SP500 the biggest drop was 7,52% os it was a “refreshing” type of correction. This a normal phase of markets. There is nothing special with that. Without these effects the markets cannot go up again.

If you look at this chart below, you will see in the last 4 years the biggest yearly drops. That is obviously a bullish market, but once a year happens a double digit drop. Which called "correction".

The point is that you shouldn’t have to be scared if you see like that. If the plunge is over the market could recover easily if the trend is still seems intact and not violated. The point is the timing, proper money management and being disciplined. If you aware of this correction patterns you will never be surprised and shocked if the market goes against you.

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The BFM Assets Team.