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by pinky1417
1940 days ago
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Oh, I didn't mean to suggest they're the same, just explaining why buying the dip isn't a good principal on its own. Something like VTI has the advantage that it's not going to ever be totally worthless unlike any one particular stock. "Buying the dip" as a strategy only makes sense in hindsight. Say it's late 2007 and you have some cash. On Sep 28 of that year, the VTI was at $75.60. By April 2008, it had fallen over 12% to around $66. But it would still go down even more. Same thing as in early 2020: the market falls 5%... do you buy then? Once it fell around 30%, could you identify that as the "bottom" given the information you had at the time? |
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