As numerous indexes crossed thresholds and hit new highs last week, a fresh wave of calls have come warning of the chance, possibly begging for the reality, of a looming market correction. But the question we need to answer is not if corrections are going to happen. We already know they will happen. And given that the S&P 500* has hit new highs 61 times over the 252 trading days of the past year, that does not seem to be any indication about an impending correction. To take advantage of the knowledge that it will happen, we need to also know when it will happen–and that has proven difficult to know and proven very painful to be wrong about. In A Correction is Coming, Barry Ritholtz dives into the reasons not to use the knowledge of an eventual market correction as a reason to change our strategies. He also addresses what we can do, as investors, to be ready for whenever a market correction might occur.
*Source: Morningstar Direct, “S&P 500 TR USD”