Part 4/8:
Are Stock Market Crashes Normal?
While they may seem alarming, stock market crashes are indeed a normal part of market cycles. The fluctuations result in patterns that every investor should familiarize themselves with:
Pullbacks: Minor price reductions of 5% to 10%, occurring almost yearly.
Corrections: More significant dips of 10% to 20%, typically seen every 1-2 years as stocks realign with fair valuations.
Bear Markets: Declines of 20% to 40%, often emerging every 5-6 years due to economic Slowdowns or rising interest rates.
Crashes: Major drops of 40% or more, occurring roughly every 10-20 years, generally prompted by larger crises.