A temporary decline of 10 to 20 percent in stock prices from recent highs. Corrections are smaller than bear markets and are considered a normal part of investing. They often happen when prices have risen quickly and investors take profits.
A stock index rises from 4,000 to 4,400 in three months. Then it falls to 3,950 over two weeks, a drop of about 10 percent. This decline is called a correction, and many investors view it as a healthy pause before prices potentially rise again.
Greater Fool is a free Chrome extension that explains terms like this in place. Highlight a word on any page, click Explain, keep reading.
Add to Chrome (free)