Is It Smart to Buy Stocks After the S&P 500 Falls Into a Correction? History Offers a Clear Answer.
Making a smart decision isn't always easy, especially as stocks are falling.
The last month has been tough for stock investors. The benchmark S&P 500 (SNPINDEX: ^GSPC) index fell four weeks straight starting in mid-February, pushing it briefly into correction territory. While stocks have recovered somewhat from the fall, the factors driving that rapid decline in prices may still leave some lingering uncertainty for investors.
Investing during a correction is tough. Once stocks start going down in price, it feels like momentum will take over and keep pushing shares lower. Bounces like the one we've seen recently could prove fleeting as markets remain uncertain about the future. That seems especially relevant in the current market, given how fast the sell-off occurred and that it was triggered by confusing trade policies that seem to change day to day.
But buying stocks when the S&P 500 enters a correction has historically turned out to be a great opportunity for investors. Despite the risk of stocks declining further, bringing on a bear market, the odds are definitely on the side of the buyers.
