For our Sharpe ratio calculation, we used the one-year U.S. T-Bill as our risk-free rate to remain consistent with our independent calendar yearly analysis. Clearly, corrections are normal and 2017 was an aberration. Note: Due to data limitations, we used price returns rather than total returns for this analysis. But the fact is that most stock market corrections are nothing more than benign short-term events that give investors a great opportunity to snag high-quality stocks at a bargain price. For example, the two-week time horizon refers to holding an S&P 500 index fund one week before and one week after the lowest point of a correction. Additionally, being invested allows you to collect dividends and interest, which you can either reinvest or use for lifestyle purposes. The U.S. stock market fell into a correction Thursday as investors punished equities in favor of safer assets as anxiety over the spread and potential impact of the virulent coronavirus. The median returns are marginally higher at 12.35%. We examined each calendar year, independently, from 1978 to 2017 and found that there was a market correction of at least 10% from the yearly peak in 22 of those years or 55% of the time. In the paper, Vanguard found that lump-sum investing – not waiting for a pullback, outperformed dollar-cost averaging/waiting to invest roughly two-thirds of the time. Even in 2020’s challenging environment, foreign companies continue to IPO in the U.S., with this year appearing poised to set a... By Sebastian Segerstrom  |  Companies and Markets. Right now, I see the potential for higher interest rates to drag on GDP (especially around the residential real estate market) but see no cause for panic in the greater economy. This analysis shows that it takes approximately nine months on average for a status quo, long-only equity investor to recover their losses following a correction. In fact, the median and average drawdowns for our sample size were 10.38% and 13.69%, respectively, placing us right in correction territory. Considering how quickly these indexes plummeted from their peak to trough (just 13 days), it got quite a few investors nervous and thinking about the plunge experienced during the Great Recession. In early February, the iconic Dow Jones Industrial Average (DJINDICES:^DJI) logged three of its eight-largest single-day point declines in history, going back almost 122 years -- 1,175 points, 1,033 points, and 666 points. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.