What is the difference between a correction and a crash?

Crashes are different to corrections because of their severity and swiftness. While corrections describe losses in value of between 10% and 20% over the course of a few months, crashes can result in much larger declines above 20% and often play out over just a few days. What is a bear market?

What is a stock market correction?

First, let’s take a look at what a stock market correction entails. A correction is normally considered to be a 10% drop in the overall market from the latest highs.

What is the difference between a recession and a stock market crash?

The bottom line is that recessions, corrections, and bear markets are all normal and healthy economic occurrences, while stock market crashes are unusual events, often driven by panic. The Motley Fool has a disclosure policy.

What is a stock market crash?

A crash is a surprising and concerning event that can be truly devastating for the economy and the stock market as a whole. These happen when the market experiences an extremely sudden and sharp drop in prices.