The past five weeks have been nothing short of a roller-coaster ride for Wall Street and Main Street. Through this past Thursday, March 26, the benchmark S&P 500 had recorded its seven-biggest single-day point gains in history, as well as 10 of its 13-largest single-sessions point losses of all-time, just since Feb. 24, 2020. The broad-based index also plunged into bear market territory far faster than any previous bear market in history.
The culprit behind this crash is the uncertainty caused by the spread of the coronavirus disease 2019 (COVID-19). With mitigation measures getting stricter within the U.S. and in other developed countries, it's without question that there will be palpable damage done to the economy in the short run.
But this is also one of those "light at the end of the tunnel" moments. That's because each and every previous correction or bear market has been eventually wiped away by a bull-market rally. Although we don't know how long a correction will last or how steep the decline will be, history shows investors that buying high-quality businesses on any significant dip in the market is a smart idea that can help you create long-term wealth.