Sunday , 14 April 2024

Stock Market Pullbacks, Corrections & Crashes: How Do They Differ?

The nature of stocks, also known as equities, is that they often suffer declines and these market downdrafts – market pullbacks, corrections and crashes – have different characteristics.

@$$4$Here is the difference between a stock market pullback, correction and crash.


  • A pullback, also known as retracement or consolidation, is a temporary drop in an asset’s long-term uptrend, with drops of from 5% to 10%.
  • They are caused by the basic law of supply and demand.
  • It is very short-term, lasting a month on average and taking another month to retrace the losses.
  • There have been more than 74 market pullbacks since the end of 1945.


  • A market correction is a drop between 10% and 20%…
  • They last, on average, from 2 to 4 months.
  • They are frequently accompanied by adverse market conditions.
  • Corrections are often seen as ideal times to buy high-value stocks at discounted prices because, since 1974, the S&P 500 has increased an average of around 8% one month after a market correction bottom and more than 24% one year later,.
  • There have been 28 corrections over the past 50 years and they have all been more than completely erased by a subsequent bull market rally…


  • …Crashes are downturns of more than 20% and are almost always the prelude to a recession, and they generally occur at the end of an extended bull market brought about by an unexpected economic event, catastrophe, or crisis that triggers panic.
  • Depending on their severity, crashes can last from 11 to 23 months and take up to a maximum of five years to climb back. The market’s worst crash was in 1929, with the Dow plunging 70% until its July 1932 trough. The damage was bad enough that the Dow took 25 years — until 1954 — to return to its 1929 level.
The above version of the original article by Kevin Mwanza ( was edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.


Please Donate Some MONEY to – Thank You! 

  • I would appreciate it – immensely – if you would show your appreciation of my efforts with a donation so I will have the enthusiasm to continue doing so.
  • For the past 12 years I have been publishing  “a unique (here’s why) financial site for sore eyes and inquisitive minds” called at no cost to the millions (yes, millions!), like you, who have visited the site over those years.
  • Every week I surf the net on your behalf looking for the 10 most informative articles written by the best commentators/analysts out there which I then edit and abridge before posting to provide you with a faster, and easier read. That has amounted to about 6,500 articles, in total, over that 12-year period.
  • If you are willing to help me out please go HERE,
    enter your donation amount, click the box if you wish to make the amount a monthly donation, and then click on your choice of payment method. It is that “fast and easy”.
  • I hope this request for money hasn’t offended you and, should you choose not to donate, that you will still continue to “Follow the munKNEE!”
  • As a thank you I will send you a link to an unpublished gem of a book on wealth creation by Monty Pelerin entitled WEALTH IF YOU WANT IT. has joined to provide you with individual company research articles and specific stock recommendations in addition to munKNEE’s more general informative articles on the economy, the markets, and gold, silver and cannabis investing.
Check out eResearch. If you like what you see then…