When is the Next Stock Market Correction Coming?

2015 Stock Market Correction

This correction which began on August 24th, 2015 is still in progress. A correction is not finished until it either reverses its trend and heads positive or becomes a dreaded bear market. The most recent S & P 500 market high was on Thursday May 21, 2015 when the index closed at 2,130.82. From there we have slid to a value of , which is a 12.3% decline off the high.

After 1,422 days without a market correction the time has come. Investors have given way to the seemingly unstoppable stock market over the past 4 years and the correction has begun. Right now we don’t know much about how far it will go but given the extended period of time that many investors have been waiting, it is conceivable that this may stick around for a period of time till all the jitters get shaken loose.

It has been since the S&P 500 has seen a correction. If you consider that the average market correction happens every 443 days, it becomes clear we are always investing on borrowed time.

When a market correction happens, it declines -14.2% on average when looking at the last 22 corrections since 1950. The most recent stock market correction started on Friday, April 29, 2011 (1363.61) and slid for 157 days where it settled on Monday, October 3, 2011, when the S & P 500 reached 1099.23.

Market Corrections

A market correction will happen. They are notoriously tough to avoid without leaving gains on the table. The patient investor is wise to actually welcome them. Much like a car after miles of progress on a trip, it can start overheating, so too can the stock market. With a car that means pulling over and allowing it some time to cool off before starting again for even more progress. A correction is the market's version of overheating. When things have been good and possibly even too good, it is time to pull over for a while and let the correction cool things off before the market can resume its march forward.

Read more about market corrections examples and explanations.

Shortest Stock Market Correction

Market corrections can be brief or they can linger on for months. The most short-lived correction lasted just 18 days losing just over 10% from Friday September 23, 1955 until Tuesday, October, 11 1955.

Longest Stock Market Correction

Some corrections can feel like an eternity. That is most certainly what happened from Tuesday September 21, 1976, to Monday March 6, 1978. Over this nearly 1 and a half (531 days) time frame, the market declined 19.4% which still remains the longest in history.

Longest Period Without a Correction

There are instances throughout the history of the stock market where bliss seems like it will carry on forever. This type of euphoria is always followed by some type of correction or bear market. Regardless, the longest period of time where the S&P 500 went without a correction was from Thursday, October 11, 1990 until Tuesday, October 7 1997 which racked up a total of 2,553 days. Most gaps between corrections don’t last that long. As we mentioned above the average is 443 days between corrections.

Shortest Period Between Market Corrections

There have been a couple of instances where market corrections stacked up on top of each other in a short period of time. From Thursday, October 3, 1974, to Thursday, November 07, 1974 there was only 35 days that stood between 2 different market corrections.

Is a Market Correction Coming?
History of Stock Market Corrections: S & P 500
What is a Stock Market Correction?