Tue Dec 31 2024, by Tyler Gardner

Three Convincing Reasons Why Buying the Dip is a Losing Strategy

Here are three reasons why buying the dip will never work for you. Prove me wrong. I'm Tyler, a former financial advisor and portfolio manager. I make financial content for free so that you don't have to pay for it.

1. The Psychology of Fear

For those of you saying you'd buy the dip, I call shenanigans. When markets truly start dipping, we usually start flipping out. Most of us do not choose to buy when the majority of the world is telling us to sell.

2. Lack of Clear Entry Points

Even if you don't start freaking out and you actually are okay buying low, how low are you willing to go? Are you waiting for a 2% relative dip, 5%, or 10%? Most people haven't established an exact entry point, so they continue to sit on the sidelines.

3. Missing Out on Gains

Once you've missed that arbitrary dip and the markets have shot back up, not only did you miss the dip, you also missed that next round of gains. And then you're going to continue to sit on the sidelines, pretending that you somehow know how to time the market.

Conclusion

The sooner you stop pretending, the sooner you can just join the smart money and spend as much time in the market as possible. If any of this is helpful, like and follow, and I'll keep trying to get you one step closer to where you need to be.

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