It appears that the stock markets have gone through a bit of a correction, or at least that is what some analysts are saying. There is some debate about whether the markets are actually in a bear market or if this is just a technical correction.
To understand what is taking place with the markets, it would be first beneficial to look at where the markets have been. It was just the end of November 2020 when the stock markets had their biggest climbs in history, with tech stocks contributing the most to the record-breaking surge.
The S&P 500 rose 38% in 2020, while the Nasdaq rose 43%, and levels in 2020 were the highest since 2007. While this remains a great accomplishment, investors may want to consider the idea that the market may not be in a bull market anymore, but instead a technical correction.
The concept of a technical correction is that the markets are over-priced and need to correct themselves in order to become healthy and find true value again. While this could mean that the markets may dip further in the coming months before stabilizing and starting a long-term trend, it does not necessarily mean that it is the start of a bear market.
Ultimately we have to review the trends in the markets over the past few months to determine whether or not it is a technical correction or the start of a bear market. At this time, the markets appear relatively level, and any further trends are speculative. However, it may be time to assess our holdings and review our portfolios, and keep an eye on the markets to ensure that we can make the best decisions for our investments.