Market correction refers to a short-term decline in stock prices, typically between 10% to 20% from recent highs, after a sustained upward trend. It is a natural and healthy part of financial markets, helping to realign asset prices with their true valuations. Corrections often occur due to factors like profit booking, global uncertainties, changes in interest rates, or weak corporate earnings.

Unlike a bear market, which represents a prolonged and severe downturn, a market correction is usually temporary and can last from a few weeks to a few months. It offers investors an opportunity to reassess their portfolios, rebalance asset allocation, and invest at relatively lower prices. Corrections are also seen as a sign of market maturity, preventing speculative excesses from building up during strong bull runs.

For long-term investors, a correction can be beneficial if approached with discipline. Instead of reacting with panic selling, understanding the reasons behind the fall helps maintain a rational strategy. Investors often use this phase to accumulate fundamentally strong stocks at discounted valuations, provided their financial goals and risk tolerance remain unchanged.

From an educational standpoint, recognizing the difference between a correction and a crash is crucial. A correction reflects short-term volatility and not a structural breakdown of the economy. Therefore, maintaining diversification, focusing on quality assets, and following a long-term approach are effective ways to navigate such market phases.

In summary, a market correction is a normal occurrence in the investment cycle. By viewing it as an opportunity rather than a threat, investors can make informed decisions that align with their long-term wealth-building objectives.