HomeNeighborhood ProHow Should You Respond...

How Should You Respond to Market “Correction”?

By Paul Harrison
As an investor, you may be gaining familiarity with the term “market correction.” But what does it mean? And, more importantly, what does it mean to you?
A correction occurs when a key index, such as the S&P 500, declines at least 10% from its previous high. A correction, by definition, is short-term in nature and has historically happened fairly regularly – about once a year. However, over the past several years, we’ve experienced fewer corrections, so when we have one now, it seems particularly jarring to investors.
How should you respond to a market correction? The answer may depend, to some extent, on your stage of life.

  • If you’re still working… If you are in the early or middle parts of your working life, you might not have to concern yourself much about a market correction because you have decades to overcome a short-term downturn. Instead of selling stocks, and stock-based investments, to supposedly “cut your losses,” you may find that now is a good time to buy more shares of quality companies while their price is down.
  • If you’re retired… After you retire, you may need to take money from your investment accounts – that is, sell some investments – to help pay for your cost of living. Ideally, however, you don’t want to sell stocks, or stock-based vehicles, during a correction – because when you do, you may be “selling low.” (Remember the most common rule of investing: Buy low and sell high. It’s not always easy to follow, but it’s still pretty good advice.)

So, to avoid being forced into selling, you need to be prepared. During your retirement years, try to keep at least a year’s worth of cash instruments on hand as well as short-term fixed income investments. By having this money to draw on, you may be able to leave your stocks alone and give them a chance to recover post-correction.
And it’s important to maintain a reasonable percentage of stocks, and stock-based vehicles, in your portfolio, even during retirement – because these investments may provide the growth necessary to help keep you ahead of inflation. Consequently, as a retiree, you should have a balance of stocks and stock-based vehicles, along with fixed-income vehicles, such as bonds, certificates of deposit, government securities and so on.
Being prepared can help you get through a correction – no matter where you are on life’s journey.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Recent

AdvertisementAd: ScreenFixing, We're here because you broke something. Phone: 404-969-6FIX, 1267 Glenwood Ave SE, Atlanta Ga 30316, http://screenfixing.comAd for A-1 Roofing. Phone: 404-627-6909 / 404-787-7001. Website: www.a1roof-remodeling.com
AdvertisementAd for A-1 Roofing. Phone: 404-627-6909 / 404-787-7001. Website: www.a1roof-remodeling.com

More from Author

Calendar March-April 2023

CALENDAR Community Meetings GPNA (Grant Park Neighborhood Association). 3rd Tuesday of every month, 7:30pm-9:00pm....

Southeastern Trust for Parks and Land Acquires Conservation Easement

By Amanda Leesburg Southeastern Trust for Parks and Land (SE Trust), a...

Spring Blooms at Oakland with Family-Friendly Events!

Visitors enjoying last year's Illumine event Photo courtesy of Historic Oakland Foundation By...

EAV Farmer’s Market Springing Back

By Katie Kriner East Atlanta Village (EAV) Farmers Market is a-springin' back...

Read Now

Calendar March-April 2023

CALENDAR Community Meetings GPNA (Grant Park Neighborhood Association). 3rd Tuesday of every month, 7:30pm-9:00pm. Check www.grantpark.org for details. SAND (South Atlantans for Neighborhood Development). 2nd Thursday of every month, 7:30pm, Ormewood Church Fellowship Hall, corner of Woodland & Delaware Avenues. EACA (East Atlanta Community Association). 2nd Tuesday of the month, 7:00pm. See www.eaca.net for details. EABA (East Atlanta Business Association)...

Southeastern Trust for Parks and Land Acquires Conservation Easement

By Amanda Leesburg Southeastern Trust for Parks and Land (SE Trust), a 501(c)3 nonprofit corporation, acquires, conserves, and utilizes natural land for its mission of Conservation, Recreation and Community. SE Trust is proud to announce the creation and filing of a perpetual Conservation Easement for Tapestry Greenspace in...

Spring Blooms at Oakland with Family-Friendly Events!

Visitors enjoying last year's Illumine event Photo courtesy of Historic Oakland Foundation By Angie Wynne March and April are filled with fun, family-friendly opportunities to experience spring at Oakland Cemetery. Phoenix Flies, Atlanta Preservation Center’s annual celebration of historic sites, comes to Oakland on March 17 for an exciting “Geology in...

EAV Farmer’s Market Springing Back

By Katie Kriner East Atlanta Village (EAV) Farmers Market is a-springin' back up on Thursday, March 30, from 4:00pm-8:00pm. It will continue every Thursday 'til mid-November.  All your favorite farmers and vendors are back, as well some new faces,  live music, market chef with free samples, good vibes, all the...

Phoenix Flies Launches March 4

By Atlanta Preservation Staff Phoenix Flies 2023 celebrates 20 years that the Atlanta Preservation Center has brought together organizations and individuals from the community to demonstrate the value of Atlanta’s historic built environment. From museums to adaptive reuse projects, to neighborhood tours to public libraries, this year’s 90...

EACA Monthly Meeting Minutes – Thursday, February 14, 2023

Call to Order / Start Meeting Recording 7:00pm. January 10, 2023, Meeting Minutes approved. January 2023 Treasurer Report approved. Key January Events Recap – Chase Miller: About 30 people came to the MLK day of service to work at Branan Towers and two Neighbor in Need homes. We...

SAND Update – February 2023

By Kate Champion, SAND president SAND’s February 9 meeting was held in person with special guests, Council Members Liliana Bakhtiari and Jason Winston. You can find the questions asked and answered in the article below.  Several items of business were presented. The Ormewood Park Makers Festival will be held Saturday,...

GPNA Monthly Meeting Minutes – Tuesday, January 17, 2023

Call to Order–7:30pm. President’s Introduction. 2023 GPNA Goals: Website refresh - GPNA will finalize and implement the rebranded GPNA website. Sign toppers - GPNA will finalize neighborhood sign toppers project and implementation. Legacy neighbors outreach & support - GPNA will continue building on success from 2022. Community engagement -...

Madison Theater Participates in the GA Trust Historic Theater Tour 

Photo by Elena Kaplan Friends of the Madison Theater (left to right) include Stephanie Cherry-Farmer, Bill Gould, Jennifer Murray. Photo by Jenny Murry Stephanie Cherry-Farmer in front of the Madison Theater By Jenny Murray On February 11, the Madison Theater in East Atlanta was included in an “Historic Theaters Expedition”...

EACA Re-Launches the Friends of Brownwood Park Group

Photo by Patrick Cousins Park Pride, EACA and community leaders gather at Brownwood Park for a walk-through in January 2023. Left to Right: Michael Halicki, Executive Director of Park Pride; Ellen Bruenderman, Director of Community Services at Park Pride; Chase Miller, EACA President; Justin Cutler, City of Atlanta...

Council Member Liliana Bakhtiari Directs One Million Discretionary Dollars to Park Pride

By Nicholas Cappon Today, the Atlanta City Council adopted 23-O-1074, authorizing a contribution of $2.8 million in district-specific funds to Park Pride, with $1 million directly to park improvements and upgrades in Council District 5. “The health and vitality of a community can be measured by the growth and...

Legacy Neighbor Spotlight: James and Lillian Rowland

By Dee Dee Abbott Imagine buying a house in Grant Park for $450 down with a monthly payment of $57. This real estate reverie was a real estate reality for James Rowland. When James and his wife Lillian moved to Grant Park in 1965, there were only three other...