The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), which is made up of Australia's top 200 public companies, has fallen 12.68% over the past six months.
The banks, Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Woolworths Limited (ASX: WOW), BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO), have each fallen between 7.5% and 26% since the beginning of March 2015.
Rebound expected
Falling stock markets (sometimes called 'corrections') make many investors very nervous. After all, no one likes to see such a large proportion of their nest egg wiped out by uncontrollable volatility.
Fortunately, analysts at Deutsche bank have stuck their neck out and believe a rebound in the ASX 200 could be just around the corner.
According to an article in the Fairfax press today, Deutsche strategist Tim Baker and his team have studied the historical performance of the ASX 200 and found that if corrections which were followed by recessions were excluded, "the market has risen by an average of 10 per cent." after each correction.
"And on only one occasion was the market lower a year after a correction," he added.
Since Australia is not expected to enter a recession anytime soon, a rebound in stock prices may be on its way.
Foolish Takeaway
While no one knows exactly which way the ASX 200 will trend from here, one thing which all Australian investors know for sure is: The ASX's top 200 stocks are, on average, 12% cheaper now than they were six months ago.
