Stock market corrections, defined as declines of 10% or more from recent highs, occur fairly regularly as a natural part of market cycles. Historically, the S&P 500 experiences a 10% correction about once per year on average. Some sources state corrections happen roughly every 1 to 1.2 years, while others cite an average of every 2 to 3 years based on different historical time frames. These corrections typically last a few weeks to a few months, with an average bottoming period of around five months and recovery often taking about four months. Corrections differ from bear markets, which are declines of 20% or more and occur less frequently, approximately every 3 to 5 years. Most corrections do not evolve into bear markets; about 75% of corrections end without becoming more severe downturns. Market corrections serve as healthy market adjustments that prevent bubbles, reset valuations, and create buying opportunities for long-term investors. In summary:
- Market corrections (≥10% decline) happen on average about once a year but can vary from once every 1 to 3 years depending on the data set and definition.
- Corrections last weeks to a few months, with typical recovery times of a few months.
- Bear markets (≥20% decline) happen less frequently, roughly every 3-5 years.
- Corrections are common and expected market events, helping to stabilize markets over the long term.
