Investing

If this market correction follows history, we are not out of the woods yet

Key Points
  • Citi Research found the average drop for a market correction was 23.8 percent since Dec. 1927.
  • The median market drop during the instances was 18.2 percent.
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The biggest question investors are asking is how much further will the market fall before resuming its march higher.

If history is a guide, the data reveals the market drop has further to go in both time and level of price decline.

The fell officially into correction territory on Thursday, down more than 10 percent from its record reached in January.

Citi Research strategist Tobias Levkovich showed the numbers behind all the market corrections in the S&P 500 since Dec. 1927 in a note to clients Monday. The firm found 40 instances when the market declined 10 percent or more.

The average fall for the S&P 500 was 23.8 percent before the bottom, while the median decline was 18.2 percent, according to the firm's analysis.

The bank said one-quarter of the 40 instances lasted less than a month with roughly half the occurrences lasting six months or less.

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