The S&P 500 is down 10%. Nasdaq plunged 15%.
The struggles continues.
The S&P 500 is dropped 10% since its peak on February 19. It’s now at its lowest level since November.
The tech-heavy Nasdaq is down 15% (correction territory)…
And the Volatility Index (VIX), colloquially known as the “fear gauge,” is on the rise.
In short, 2025 has started with a serious case of market whiplash… exactly what I warned my Jolt readers about.
If you’re feeling anxious, this essay’s for you.
“Is this correction a buying opportunity?”
Any smart investor should be asking themselves this question today.
After all… the market had been going straight up, leaving many investors behind.
We’ve all been there. Wanting to own certain stocks but refusing to “chase” them as their prices climbed higher and higher. “I’ll buy the next dip,” we tell ourselves.
Well, the dip’s here. But it’s never quite how you picture it, right?
Because a dip isn’t just a number. It comes with a flood of emotions like fear and paranoia. These emotions helped our cavemen ancestors survive. But in modern-day investing, they’ll cloud your decision making if you don’t understand and control them.
To achieve that mastery over your own emotions, there’s no substitute for experience.
Do you remember what happened almost exactly five years ago?
If you’ve been a RiskHedge reader for that long, you’ll recall it well.
COVID and lockdowns were wrecking the stock market.
I urged subscribers to buy stocks in March 2020, right when fear was at its peak during the COVID crash.
I sent out back-to-back alerts on March 12 and 13… and put things into perspective in my Disruption Investor advisory:
What you do now will define the next 5–10 years of your investing life. Right now, it’s extremely important to understand where we are… and how we’ll set ourselves up for maximum profits in the months ahead.I’ll be frank… I don’t know if we’ve seen the bottom in stocks yet.But here’s the important thing: I believe markets are closer to bottoming than most people think.My research suggests we’re closer to the bottom than the top. And if stocks haven’t hit the bottom yet, they’re at least in the vicinity. And now’s the time to prepare for what’s next.
Those who followed my guidance came out on top as markets staged a historic recovery.
I made similar calls during the brutal 2022 bear market, when inflation fears and rate hikes were battering stocks.
You may remember we also published The Crisis Report in 2022… in which my colleague Chris Wood recommended 10 world-class, dominant disruptor stocks like Broadcom (AVGO) and Alphabet (GOOG) that were trading at crisis prices. As he said, it was a chance to “buy Ferrari assets at Honda Civic prices.”
Last we checked, the average recommendation in that report was up 50%.
I realize today’s market is nowhere near as bad as 2020 and 2022. But I can see similar emotions starting to creep in.
Remember: We’ve been through much worse. And we came out wealthier on the other side by controlling our emotions.
Plus, if you’ve been following along, you saw this market weakness coming.
As I mentioned in my Jolt newsletter in early January, “I’m ready for a pullback, and you should be too.”
Now, it’s time to execute the game plan.
But don’t just take my word for it…
Here’s what the second-best investor in history says about times like these…
I recently shared why I believe Peter Lynch is the best investor not named Warren Buffett.
During his 13 years running the famed Magellan Fund, he generated average annual returns of 29.2%. That turns $10,000 into $279,520.
In his famous 1994 lecture at the National Press Club, Lynch said:
History teaches you the market goes down. It goes down a lot. The math is simple. There have been 93 years this century. The market has had 50 declines of 10% or more. With 50 declines in 93 years, the market falls at least 10% about once every two years.Of those 50 declines, 15 have been 25% or more. We’ve had 15 declines of at least 25% in 93 years, so every six years, the market has a 25% decline.
Of course, no one knows exactly when the market will turn lower. You just need to know that it will.
Lynch again:
It’s good when the market goes down. If you like a stock at $14 and it goes to $6, that’s great… You hope for $22; $14 to $22 is terrific, $6 to $22 is exceptional, so you take advantage of these declines.
$14 to $22 is a 57% gain.
$6 to $22 is a 266% gain.
Here’s what to do…
First, resist the emotional urge to sell great stocks during market weakness.
But most importantly, consider this volatility as a gift — an opportunity to accumulate positions in extraordinary companies at bargain prices.
For more insights and analysis, subscribe to my investing letter The Jolt⚡.
I publish fresh research every Monday & Friday.
— Stephen McBride, Chief Analyst at RiskHedge
Is this correction a buying opportunity? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.