A market pullback is a temporary decline in stock prices, typically ranging from 5% to 10%, following a recent high. Unlike a market correction or bear market, pullbacks are short-lived and often driven by profit-taking, economic data, or investor sentiment shifts. They are common in healthy markets and can offer buying opportunities for long-term investors. Pullbacks help cool overheated markets and allow for reassessment of valuations. While they can cause short-term anxiety, seasoned investors view them as natural market behavior. Understanding pullbacks helps investors stay focused on long-term goals and avoid emotional decisions driven by short-term market fluctuations.
