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> The market is down because the future prospects for those businesses just got much worse. Yeah you can buy them at a cheaper price, but their corresponding fu

> The market is down because the future prospects for those businesses just got much worse. Yeah you can buy them at a cheaper price, but their corresponding future output remains down as well. It should be noted that these moronic "buy the dip" claims are happening when Dow Jones is in a freefall, so the poor people who bought the dip on Friday will today wake up with a portfolio loss of >5% without the market even reopening. It's funny when these chants take place when prices start to plummet. It's like investors are screaming for unwitting people to buy the bag off their hands.

Aurornis 2y ago
To be honest, “buy the dip” is generally cope that people tell themselves. The average investor isn’t sitting on a pile of cash just waiting to move it into the market. People investing periodically over decades have far more in the market than out. The “buy the dip” stuff ends up being a little bit here or there so they can convince themselves not to worry, not an appreciable swing in their portfolio.
- e40 2y ago
  Buy the dip is what rich people do to get richer.
  - Aurornis 2y ago
    Rich people already had their money invested. To buy the dip you need liquid cash sitting around earning very little, hoping the market goes down. Reallocate portfolios if that makes sense, but much of the “buy the dip” stuff implies good market timing: To do it in meaningful amounts you’d have to pick the right times to not invest, accumulating cash at a lower rate, then you’d have to know precisely when to invest it again, switching it back into the stock market.
    - arcastroe 2y ago
      > Reallocate portfolios if that makes sense Yes. This is one of the reasons 80 stocks / 20 bonds is a common strategy. The rebalancing "forces" you to buy low and sell high. When stocks dip, your portfolio might become unbalanced at 70/30, so you reallocate funds to buy stock bringing you back to 80/20. Conversely, if stock market soars, you might get to 90/10, and selling stocks would bring you back to 80/20. Performing this balancing is, in effect, "buying the dip"
  - hmcq6 2y ago
    Survivorship bias
- pton_xd 2y ago
  "Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash.
  - motorest 2y ago
    > "Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash. Not really. It's literally a call to action to counter what the market is doing, in hopes that it can prevent and recover trends. They are literally telling others to buy when everyone around them is selling.
    - wombatpm 2y ago
      My two favorite trading terms: “catching a falling knife” and “dead cat bounce”. You don’t want to buy until you’re sure it’s reached bottom. So you look for signs of rebound, but you can be fooled by a dead cat bounce. Because if dropped from high enough, even a dead cat will bounce before coming to rest.
    - timr 2y ago
      Being able to do the opposite of what others do is a useful quality to have as an investor. I don't tell random people to "buy the dip" because I don't want to be responsible for the myriad dumb ways people interpret that advice, but it's not at all an unreasonable thing to say to someone who knows what they're doing.
      - motorest 2y ago
        > Being able to do the opposite of what others do is a useful quality to have as an investor. Textbook example of survivorship bias.
- motorest 2y ago
  > To be honest, “buy the dip” is generally cope that people tell themselves. I don't think so. "Buy the dip" is a call to action to third parties to irrationally invest their resources in a way that benefits you personally. It's a call to not believe what they are seeing, and that doing the opposite of what would be prudent or reasonable is somehow something that is in their best interests. You already hear fantastic claims like "buying the dip is what rich people do to get rich". Yeah, buy low-sell high is good business. But that only works when you actually buy low. If you buy in when the freefall starts, aren't you buying high? How is that good business?
liendolucas 2y ago
> will today wake up with a portfolio loss of >5% without the market even reopening. That's pretty much irrelevant unless you opt out next reopening. If you have your portfolio down 15%, 20% or 30% it does not matter. That's the short term picture. If you're investing and looking at how those numbers fluctuate to make decisions and panic you will lose money for sure. No different like going to the casino. You're supposed to buy and hold forever, regardless the market crashes or rises. That's Bogle's advice and I believe is sound advice. So, there could be an opportunity to buy lower now if you are playing the long game.
- seanmcdirmid 2y ago
  We can fall a lot more, and people who are buying the dip on credit aren't necessarily taking a long term view of the market. Who is keeping a few hundred K in their bank account just in case the market crashes so they can take advantage of it? Also, 2008 you needed 5 years to recover if you bought at peak (buying as it was lower of course means less time to recover). In 1930, you were looking at 20 years. You could also lose your job if the market really tanks, and buying the dip just means you are less liquid at a time when you need money for living expenses.
  - liendolucas 2y ago
    You're assuming something like all or nothing. As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account. Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly. If people are taking credits to do that, well they are making an extremely risky move as well. Just because the market could go down doesn't mean that you have to make an all-in move.
    - seanmcdirmid 2y ago
      > You're assuming something like all or nothing. I'm assuming worst case, which is what you have to prepare to survive through. > As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account. You are supposed to have 3-6 months of living expenses in your savings account just in case you lose your job. Is that what you are talking about using to invest in a dip? > Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly. Yes, but you are also saving money for events where you need liquidity right? If the tariffs go on for awhile and consumption becomes expensive, we can always just cut back on consumption and invest that money instead (Americans consume a lot anyways), that is what the Chinese have been doing all along at least (although they wished their consumers would start consuming more). We are basically going to swap places with the Chinese, the writing on the wall is clear.

Aurornis 2y ago

To be honest, “buy the dip” is generally cope that people tell themselves. The average investor isn’t sitting on a pile of cash just waiting to move it into the market. People investing periodically over decades have far more in the market than out. The “buy the dip” stuff ends up being a little bit here or there so they can convince themselves not to worry, not an appreciable swing in their portfolio.

e40 2y ago
Buy the dip is what rich people do to get richer.
- Aurornis 2y ago
  Rich people already had their money invested. To buy the dip you need liquid cash sitting around earning very little, hoping the market goes down. Reallocate portfolios if that makes sense, but much of the “buy the dip” stuff implies good market timing: To do it in meaningful amounts you’d have to pick the right times to not invest, accumulating cash at a lower rate, then you’d have to know precisely when to invest it again, switching it back into the stock market.
  - arcastroe 2y ago
    > Reallocate portfolios if that makes sense Yes. This is one of the reasons 80 stocks / 20 bonds is a common strategy. The rebalancing "forces" you to buy low and sell high. When stocks dip, your portfolio might become unbalanced at 70/30, so you reallocate funds to buy stock bringing you back to 80/20. Conversely, if stock market soars, you might get to 90/10, and selling stocks would bring you back to 80/20. Performing this balancing is, in effect, "buying the dip"
- hmcq6 2y ago
  Survivorship bias
pton_xd 2y ago
"Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash.
- motorest 2y ago
  > "Buy the dip" is just code for "stay invested." Obviously most people aren't sitting on piles of cash. Not really. It's literally a call to action to counter what the market is doing, in hopes that it can prevent and recover trends. They are literally telling others to buy when everyone around them is selling.
  - wombatpm 2y ago
    My two favorite trading terms: “catching a falling knife” and “dead cat bounce”. You don’t want to buy until you’re sure it’s reached bottom. So you look for signs of rebound, but you can be fooled by a dead cat bounce. Because if dropped from high enough, even a dead cat will bounce before coming to rest.
  - timr 2y ago
    Being able to do the opposite of what others do is a useful quality to have as an investor. I don't tell random people to "buy the dip" because I don't want to be responsible for the myriad dumb ways people interpret that advice, but it's not at all an unreasonable thing to say to someone who knows what they're doing.
    - motorest 2y ago
      > Being able to do the opposite of what others do is a useful quality to have as an investor. Textbook example of survivorship bias.
motorest 2y ago
> To be honest, “buy the dip” is generally cope that people tell themselves. I don't think so. "Buy the dip" is a call to action to third parties to irrationally invest their resources in a way that benefits you personally. It's a call to not believe what they are seeing, and that doing the opposite of what would be prudent or reasonable is somehow something that is in their best interests. You already hear fantastic claims like "buying the dip is what rich people do to get rich". Yeah, buy low-sell high is good business. But that only works when you actually buy low. If you buy in when the freefall starts, aren't you buying high? How is that good business?

liendolucas 2y ago

> will today wake up with a portfolio loss of >5% without the market even reopening. That's pretty much irrelevant unless you opt out next reopening. If you have your portfolio down 15%, 20% or 30% it does not matter. That's the short term picture. If you're investing and looking at how those numbers fluctuate to make decisions and panic you will lose money for sure. No different like going to the casino. You're supposed to buy and hold forever, regardless the market crashes or rises. That's Bogle's advice and I believe is sound advice. So, there could be an opportunity to buy lower now if you are playing the long game.

seanmcdirmid 2y ago
We can fall a lot more, and people who are buying the dip on credit aren't necessarily taking a long term view of the market. Who is keeping a few hundred K in their bank account just in case the market crashes so they can take advantage of it? Also, 2008 you needed 5 years to recover if you bought at peak (buying as it was lower of course means less time to recover). In 1930, you were looking at 20 years. You could also lose your job if the market really tanks, and buying the dip just means you are less liquid at a time when you need money for living expenses.
- liendolucas 2y ago
  You're assuming something like all or nothing. As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account. Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly. If people are taking credits to do that, well they are making an extremely risky move as well. Just because the market could go down doesn't mean that you have to make an all-in move.
  - seanmcdirmid 2y ago
    > You're assuming something like all or nothing. I'm assuming worst case, which is what you have to prepare to survive through. > As I mentioned I do investing regularly, just as if you were saving money after you paid your bills and you have spare money that otherwise would be sitting in your bank account. You are supposed to have 3-6 months of living expenses in your savings account just in case you lose your job. Is that what you are talking about using to invest in a dip? > Even if I had the amount you mentioned it would be at least for me too risky to do that move. I would do it regularly. Yes, but you are also saving money for events where you need liquidity right? If the tariffs go on for awhile and consumption becomes expensive, we can always just cut back on consumption and invest that money instead (Americans consume a lot anyways), that is what the Chinese have been doing all along at least (although they wished their consumers would start consuming more). We are basically going to swap places with the Chinese, the writing on the wall is clear.