Stock market correction: A once-in-a-lifetime chance to get rich?

Some ASX shares are still in correction territory today. Could this be a chance to buy?

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The S&P/ASX 200 Index (ASX: XJO) is having a cracking day today. At the time of writing, the ASX 200 has added a healthy 0.88%, listing the index to just under 7,350 points. Earlier this morning, the ASX 200 touched a high of 7,375 points, which is the highest level the index has been in seven months.

But zooming out, and the picture still looks a little bleak for the ASX 200. The index remains in the red for 2022 so far, currently down 2.18% year to date.

Today's pricing leaves the index around 3.7% off of the all-time high of over 7,620 points that we saw back in August last year. Since its pre-COVID peak in February 2020, the ASX 200 is also up by around 3% today.

The reality is that while many ASX 200 shares have lifted meaningfully over the year so far, many others have not.

So yes, banks and miners have been doing exceptionally well this year. Commonwealth Bank of Australia (ASX: CBA) shares are up 5.84% year to date right now. BHP Group Ltd (ASX: BHP) shares have risen by 9.9%.

But Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), Wesfarmers Ltd (ASX: WES) and Macquarie Group Ltd (ASX: MQG) are all nursing steep losses for the year.

In fact, Woolies, Macquarie and Wesfarmers are all down by more than 10% over the year, which puts them in technical 'correction' territory. And that's just some of the larger ASX 200 shares.

Spare a thought for Xero Limited (ASX: XRO) or Block Inc (ASX: SQ2). These leading ASX 200 tech shares have gone backwards by a painful 49.5% and 44% respectively over 2022.

So we have a real two-speed stock market going here.

Stock market correction or stock market sale?

But this could also represent an incredible opportunity to build wealth. The best investors, such as Warren Buffett, unequivocally love low stock prices. The company has to be of top-notch quality of course. But history shows that big share price pullbacks of quality shares are almost always a rare and lucrative opportunity.

Let's focus on Xero for a moment. This is an ASX share that, earlier this month, reported revenue growth of 20% for the first half of its financial year (the six months ending 30 September). Earnings before interest, tax, depreciation and amortisation (EBITDA) were up 11%, while total subscribers grew 16%.

Xero reported similar numbers back in its full-year results for FY2022 in May. Yet investors have slashed the valuation of this company by half in 2022.

If Xero ever gets back to its all-time highs of close to $155 a share, investors would enjoy an upside of more than 100% from today's pricing. This is not guaranteed of course. But it's arguably likely at some point if Xero keeps putting up numbers like we saw earlier this morning.

The market can give investors once-in-a-lifetime opportunities. Buying BHP shares at over $27 each back in March 2020 was one. Buying Xero today could be another. Or Macquarie. Or Block. History tells us that buying when the crowd is selling is the best way to make money in the share market.

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Block and Xero. The Motley Fool Australia has positions in and has recommended Block, Telstra Group, Wesfarmers, and Xero. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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