Treasury Secretary Scott Bessent has broken with convention, calling market corrections “healthy” and an antidote to euphoric market action. This sentiment is not entirely unfounded, as history shows that such corrections are common and often followed by a strong rebound.
In recent decades, S&P 500 corrections – defined as a 10% decline from its recent peak – have occurred dozens of times. According to Carson Investment Research’s Ryan Detrick, since World War II, only about one-quarter of these corrections have led to bear markets (a 20% decline).
Data suggests that market downturns are relatively short-lived. On average, it takes five months for the market to fall from its peak during a correction, and then another four months to recover. Following a correction, the market tends to rise strongly, with stocks averaging a 32% gain one year after the event.
While past performance is no guarantee of future results, these statistics do offer some reassurance that even in times of market uncertainty, corrections can be an opportunity for growth rather than a harbinger of disaster.
Source: https://www.axios.com/2025/03/17/scott-bessent-market-corrections-healthy