Time correction is a phenomenon in the financial world where prices of the underlying asset with a financial consideration do not hover sharply in either direction i.e. price fall or price gains do not happen in huge ways either. The likely consequence of such a happening is that investors fail to get their desired and estimated gains in due time.
Price during such a scenario only change marginally and remain rangebound for a certain timeframe. The overall outlook is neither too positive nor too negative. Such a price movement which is sideways in nature is referred as time correction.
The phenomena can be witnessed in stock markets, real estate market and other areas of the financial world where price is a major consideration.
What investors need to be cautious of during the period of time correction?
Holding and Selling Decision Become Tough: With no significant gains and prices hovering around some benchmark point for a ample period of time, makes investors wary regarding hold and sell decision.
Financial goals remain unmet and get delayed: You never know for what amount of time you can be the prey to this phenomena if it happens to engulf your investment, so it may be the case that you do not meet the financial goal associated with such an investment or it gets deferred.
Difficult to manage and deal with time correction: If the immediate period preceding the time correction phase see a sharp rise in the financial asset then it is difficult to assert the time when the same boom can be seen.
No definite price trend can be seen during the period: Though the price changes are only rangebound, the phase is not reflective of any clear price trend.
Time correction also leads to saturation in demand at particular price levels