After A Roller-Coaster Month, Is A Bear Market On Its Way?

If the market was looking to get our attention, it has it now.

Since Jan. 13, the SP has dropped at least 1% on three occasions. It now stands nearly 5% below its 52-week high.

At this point, investors have begun to wonder if the market choppiness is a sign of a looming correction, which is defined as a 10% pullback (a bear market is a pullback of 20% or more).

It's been quite a while since we've had a market correction: It happened once in 2010, 2011 and in the middle of 2012, but it hasn't happened since.

Notably, each correction has been followed by an impressive rebound, and some investors would welcome such a purge. In a market where values remain hard to find, pullbacks create solid openings. If we are entering into a corrective phase, history suggests it would last a couple of months. (The 2011 correction was quite rapid and due solely to the government shutdown.) Continue reading "After A Roller-Coaster Month, Is A Bear Market On Its Way?"