stock market crash photo

 

Just because we’re experiencing our first stock market correction since 2011 doesn’t mean it’s time to panic. Here are six things you should be aware of when it comes to stock corrections.

1. Stock market corrections happen often

The first thing you should know is that stock market corrections happen — and fairly often. The U.S. economy naturally peaks and troughs over time, and in response the stock market will also have its peaks and troughs.

2. Stock market corrections rarely last long

In a broader context, while a stock market correction is an inevitable part of stock ownership, corrections last for a shorter period of time than bull markets.

3. We can’t predict what’ll cause a stock market correction

A stock market correction may be inevitable, but one thing they aren’t is predictable.

4. Stock market corrections only matter if you’re a short-term trader

Another important point you should realize is that stock market corrections really aren’t an issue if you remain focused on the long-term with retirement as your goal. The only people who should be worried when corrections roll around are those who’ve geared their trading around the short-term, or those who’ve heavily leveraged their account with the use of margin.

5. They’re a great time to buy high-quality stocks at a bargain

For the long-term investor, a stock market correction is often a great time to pick up high-quality companies at an attractive valuation.

6. They’re also a good reminder to reassess what you own

Lastly, a stock market correction is a good reminder for long-term investors to reassess their holdings.

This post is based on the great content written inĀ 6 Things You Should Know About a Stock Market Correction, you should go there to read more about this subject.

stock market crash photo

Photo by AZRainman

Photo by wsilver

Over the past few years, the richest company in the world has continued borrowing increasing amounts of money from all over the world. Apple’s [stckqut]AAPL[/stckqut] debt position has ballooned considerably ever since it launched its capital return program in 2012. Including commercial paper and long-term debt (current and noncurrent), Apple had an incredible $54 billion in debt at the end of the second quarter, a figure that’s been steadily rising over the years.

What’s more, after the quarter closed Apple detailed plans to raise even more debt capital. The Mac maker sold $2 billion in its first sterling-denominated bond offering in July, then proceeded to sell another $2 billion in so-called “Kangaroo” bonds in Australia as it continues to diversify its credit investor base.

There are many benefits of this debt strategy that have been regularly noted by investors. Apple gets to avoid repatriation taxes since it doesn’t need to tap foreign reserves, which now consist of nearly 90% of total cash. It gets to fund its share repurchase program, driving significant earnings accretion. Heck, Apple even gets to lower its weighted average cost of capital, or WACC, by essentially swapping out equity capital for debt capital.

Even with the low-interest environment that we’re currently in, all that debt adds up and can cost a pretty penny. Yet here’s another reason why investors should love the company’s debt strategy: all that debt comes at no net cost.

Source: 1 More Reason Why Investors Should Love Apple Inc.’s Debt Strategy — The Motley Fool