For example, the crash in 1987 was a 22 percent loss, even though the actual amount of points lost was less than the correction a few weeks ago. Knox said the correction actually may have helped the market. Anything can spark a correction like this one. In this case, the Asian currency crisis and drop of the Hong Kong market by 20 percent caused many Dow investors to sell their stocks. This caused a selling frenzy, which caused the correction.
Many American stocks depend on the Asian market.
Although some investors lost money in the correction, the group was not affected very much, Leifer said. Arania Adolphson '99, secretary of the group, agreed with Leifer. However, it recovered pretty quickly. The latest trend in investing, online trading, actually played a role in the correction. Stocks are usually sold and bought through brokers who charge their investors a commission for giving investment advice.