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Tame the market with seven facts to conquer your stock fears
Embrace the upside: Understanding and navigating stock market corrections
If the idea of stock market corrections makes you nervous, you’re not alone.
However, understanding the truth about stock market corrections can free you from fear and empower you to take control of your financial future.
The fact is, corrections and even crashes are a natural part of the market cycle, and fearing them can cost you more than the corrections themselves ever could.
Investing is a participation game, and sitting on the sidelines out of fear may be the biggest financial mistake you can make.
Let’s explore seven essential facts about stock market corrections and how they can help you overcome the fear of investing.
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Corrections Are Normal
The first fact that will free you from the fear of stock market corrections is that they happen frequently—about once a year, on average, since 1900.
A correction, defined as a market drop of 10% or more from a recent high, is a routine event.
Corrections occur for many reasons, from geopolitical uncertainty to economic reports that don’t meet expectations and even dare I say it, market manipulation!
They’re not a sign of doom; they’re part of the market’s natural rhythm.
Understanding that corrections are a regular occurrence can shift your mindset.
Instead of seeing them as a threat, you can view them as an opportunity to buy stocks at lower prices.
History shows that the market eventually recovers and continues its upward trend, rewarding those who stay invested.
FILE PHOTO: Traders work on the trading floor at the New York Stock Exchange
Most Corrections Don’t Become Bear Markets
Another reassuring fact is that less than 20% of all corrections turn into bear markets, which are defined as declines of 20% or more. The last 20% plus correction we saw was the first six months of 2022.
This means that the majority of corrections are temporary pullbacks rather than prolonged downturns.
While corrections can feel unsettling, they’re rarely the beginning of a sustained decline.
By keeping this fact in mind, you can avoid making emotional decisions during market dips.
Instead of selling in a panic, focus on your long-term goals and remember that most corrections resolve quickly.
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Nobody Can Predict Market Movements Consistently
The fear of corrections often stems from a desire to predict the market’s next move. But the reality is that nobody can consistently forecast whether the market will rise or fall.
Even seasoned professionals and economists get it wrong more often than not. I often find myself talking about people like Robert Kiyosaki and Jim Cramer who are famous for their big claims about the market and being wrong, repeatedly!
This unpredictability highlights the futility of trying to time the market.
Instead of attempting to guess when a correction will happen, adopt a long-term investing strategy.
Staying invested through market ups and downs ensures you don’t miss the eventual recovery and growth.
The Market Rises Over Time
Despite short-term setbacks, the stock market has a long history of rising over time.
From 1926 to today, the S&P 500 has delivered an average annual return of about 10%.
This growth includes periods of corrections, bear markets, and even major crashes that includes the pandemic.
The lesson here is clear: the market’s upward trajectory rewards patience and consistency.
Short-term volatility is a small price to pay for long-term gains. By staying invested, you allow compounding to work in your favour, growing your wealth over time.
Bear Markets Are Rare and Temporary
Historically, bear markets—declines of 20% or more—have occurred about every three to five years.
While they can be unsettling, they are temporary and eventually give way to bull markets.
The average length of a bear market is about one year, while bull markets can last for several years, far outweighing the declines.
Knowing that bear markets are infrequent and short-lived can help you maintain perspective. Instead of fearing them, view them as part of the natural cycle that leads to long-term growth.
In fact, bear markets can be a good time to purchase stocks that you have identified as good long term growth prospects and add to them at the reduced prices, while others are exiting in fear.
I call this turning the tables and becoming a professional of the market.
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Pessimism Turns to Optimism
Another key fact is that bear markets inevitably give way to bull markets.
Pessimism about the economy or corporate earnings is eventually replaced by optimism as conditions improve.
This cycle of negative sentiment turning positive is what drives market recoveries and new highs.
Understanding this dynamic can help you stay calm during periods of market stress.
When others are panicking, remind yourself that optimism and growth are on the horizon.
Staying invested allows you to participate in the recovery.
The Greatest Danger Is Staying Out of the Market
Perhaps the most important fact is that the biggest danger to your financial future isn’t a market correction or crash—it’s being out of the market entirely.
Missing just a few of the market’s best days can have a devastating impact on your long-term returns.
For example, if you missed the 10 best days in the market over a 20-year period, your returns would be significantly lower than if you had stayed invested throughout.
Let that sink in for a moment, just 10 days, and they aren’t published beforehand for everyone to know when they are coming.
This highlights the importance of participating in the market, even during periods of volatility.
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Conclusion: Embrace Stock Market Corrections
The fear of stock market corrections often stems from misunderstanding their frequency, impact, and role in the investing process.
By embracing these seven facts, you can shift your perspective and see corrections for what they are: temporary setbacks that lead to long-term growth.
The key takeaway is clear: fear of what might happen is costing you your financial future.
Investing is a participation game, and staying on the sidelines guarantees you’ll miss out on the market’s growth. Take control of your financial future today, embrace corrections as part of the journey, and focus on the long-term rewards of staying invested.
Andrew Woodward is the Founder of The Investor’s Way and host of Investment Insights on Ticker.
First, the tariffs from China hit Australian exporters now it’s the Trump tariffs on steel and aluminium – and as we have just learnt there will be no exemption.
How will these measures affect the USA, but also China, Australia and the rest of the global economy?
Like the China COVID tariffs, the Trump tariffs will hurt Australian workers.
After all, 1 in 5 Australian workers depend on exporters and exporters pay 60 per cent higher wages on average than non-exporters in union jobs with EBAs. This will be bad for the steel workers of the Illawarra and the aluminium workers of Portland, and will also be inflationary, and put upward pressure on interest rates. That’s why we have seen the impact of tariff decisions (and tariff uncertainty) hitting the Australian share market and superannuation balances.
As a former Australian Prime Minister, could Ambassador Kevin Rudd got an exemption? I am sure he’s trying. But his pre-election comments disparaging Trump have not helped Australia’s interests not have the recent comments of another former Prime Minister Malcolm Turnbull. But to be fair, both Rudd and Turnbull have also been critical of Beijing.
Of course, Australia is not alone. The USA’s North America closet trading partner, Canada is in the same boat, as is Mexico. Canada has just had a leadership election with former Bank of Canada Governor Mark Carney (who was also Bank of England Governor) taking over as Prime Minister of Canada from Justin Trudeau. The Canadian Tories led by Pierre Poilievre are going to paint Carney as a Globalist, more comfortable in Switzerland than Saskatoon, but the tariffs on Canada give the new Prime Minister a chance to wrap himself in the Maple Leaf and fight the Trump tariffs. Carney can also paint Poilievre as Trump lite, and improve the Liberals chances in a contest suffering from the unpopularity of Trudeau. When a central banker can replaced a charismatic second-generation politician as Prime Minister and have a better chance we know we are living in interesting times.
With China and the USA unreliable trade partners, what options does Australia have? The Albanese Labor Government, to their credit have improved relations with our North East Asian trading partners like Japan and South Korea, Taiwan, ASEAN (with the special Australia ASEAN summit in Melbourne last year) as well as Europe and the emerging markets of the Middle East and North Africa (MENA) and Latin America.
We could actually get closer to Canada under their new Prime Minister, given our similar economic and political backgrounds (if not geography) and current situation on steel and aluminium tariffs. Canada has also had its issues with Beijing as well as Washington.
So forget the tyranny of distance, and May the Moose be with you.
Professor Tim Harcourt is the Chief Economist of IPPG at University of Technology Sydney (UTS) and host of The Airport Economist on Ticker.
Tim is also former chief economist of the Australian Trade Commission (AUSTRADE), the Australian Council of Trade Unions (ACTU) and the Reserve Bank of Australia (RBA).
Since the start of the pandemic in 2020, many of Australia’s property markets have experienced some extraordinary price growth.
Many locations, both city-based and regional, achieved unprecedented price increases with median house and unit prices soaring as demand hit new highs. Where once a million-dollar house or unit median was unusual, that recent growth has launched many locations into that club for the first time.
As of January 2025, there were 1,194 suburbs or towns with a median house price or median unit price of $1 million or more – 50 more than in September 2024.
These figures show that although price growth may have eased in some locations in the past six months, the number of million-dollar markets continues to increase throughout Australia.
And there are still plenty of opportunities for investors to find markets that are set to tip over into million-dollar markets in 2025.
The latest Hotspotting and Propertybuyer, National Million Dollar Hotspots report shows there are plenty of markets teetering on the edge of a million-dollar median.
They are the markets where price growth has been steady in recent years and demand remains strong. ith that trajectory set to continue, these markets will soon breach the million-dollar barrier.
They are also strong markets for investors, where rents have been rising, yields are solid and vacancy rates are low.
Residential properties line the Sydney suburb of Birchgrove in Australia.
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Million-dollar median
There is a distinct lure to investing in a suburb with a million-dollar median and it’s not just the prestige of the price tag. The magic of buying in a million-dollar suburb is its capital growth potential.
By reaching a million-dollar median, it’s already proven to be a desirable location where owner-occupiers and investors are prepared to pay top dollar to secure a piece of the action.
There are plenty of inner-city markets throughout Australia which already have million-dollar medians, but successful investors are those who find locations where prices aren’t just rising, but the fundamentals and amenities are in place to ensure ongoing solid price growth and increasing demand for properties in the suburb.
It’s essential when considering a million-dollar location to invest in that it meets a variety of criteria, not just price point. There needs to be ongoing demand for property and significant amenities to meet community needs, such as public transport, shops, schools and recreation spaces, whether that be beaches, parks or lakes.
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Employment opportunities
Infrastructure spending is also important, as is solid population growth and access to good local employment opportunities. These are factors that will keep buyers returning time and again to these suburbs and increased buyer demand is what will keep prices increasing to $1 million and beyond.
Southport on the Gold Coast is a good example of this. Within less than six months, the median house price in Southport, which was a selection in our October 2024 report, has breached the $1 million median mark.
It had a median house price of around $970,000 in September 2024, which hit $1.04 million in February 2025 – that’s a rise of $70,000 in just five months.
The suburb has achieved 15% median house price growth in the 12 months to February 2025 – and is an example of what can be achieved in the Million Dollar Hotspots.
Terry Ryder is the Managing Director of HotSpotting
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