Building While Bargain-Hunting

For newer career pilots establishing their financial foundation:

Understanding This Market Corrections

What Is a Correction? A market correction is a decline of 10% or more from recent highs. These are normal, recurring events in market cycles, not reasons to panic.
Historical Context: On average, the market experiences a 10%+ correction approximately once per year. Nearly every significant correction in history has eventually recovered within several months.

First Steps

Establish Your Emergency Fund First: Before investing in individual stocks, ensure you have 3-6 months of living expenses in a high-yield savings account.
Maximize Retirement Basics: Contribute at least enough to your company 401(k) to get the full employer match before considering individual stocks.
Consider Low-Cost Index Funds: For most beginning investors, broad market index funds provide diversification and remove the pressure of stock selection.

Cautious Entry Strategy

Dollar-Cost Averaging: Instead of investing a lump sum, divide your investment into equal portions and invest at regular intervals (weekly, monthly or quarterly).
Start Small: Limit individual stock investments to no more than 5-10% of your portfolio while you're learning.
Focus on Quality: Look for established track records:
- Strong brand names (bigger firms)
- Consistent share pricing (narrow spreads) and trading volume
- Three or more years of history
- Products or services with enduring demand

Learning Resources