Financial expert explains why the stock market is due for a correction and what it means

HUNTSVILLE, Ala. (WAFF) – The stock market has surged over the past year leaving many to wonder if the streak can continue. Financial expert, Marshall Clay with The Welch Group said the market is due for a course correction, and that’s normal.

“It’s been kind of a unique last couple of years in the stock market and the broader market,” Clay said. “In 2022, it was down around 18.5%. Going into 2023, we had a little bit of a rebound, so it was up about 26.3%. And so far in 2024, we’re up maybe just north of 7% right now.”

The wealth management expert said the key takeaway is that the market has moved up over 20% in the last five months.

“So, we’ve come a long way and not to get too wonky, but the market probably has gotten a little bit ahead of itself,” Clay said. “Doesn’t necessarily mean that there’s going to be a breather, but there’s a high probability that there may be a 5-10% correction at some point in the not too distant future of the market.”

Since these course corrections are normal, Clay tells his clients not to panic.

“I think it’s case-by-case specific,” Clay said. “If you’re somebody who gets really worried when the market pulls back five or 10% I’d say, you know, maybe you need to figure out if you need to stay in the stock market.”

The Certified Financial Planner adds there are things you can do to stay ahead of the curve, like rebalancing your portfolio, securing cash flow and avoiding any big bets in the market.

“If you’re a retiree and you’ve got a cash flow demand from your portfolio, you want to make sure that you understand where that cash flow is coming from for at least the next six to 12 months,” Clay said.

For more ways to stay financially savvy, visit The Welch Group’s website.

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