During the recent stock market correction, I decided to buy the dip. But this time, I didn’t just buy my usual dip-buying amount of $25,000 to $100,000. I went much bigger. All told, I spent over $1 million buying the S&P 500 and various tech stocks like Meta, Microsoft, and Amazon as I've been chronicling in my free weekly newsletter.
Spending over $1 million buying stocks was the most I had ever invested in a 50-day period. The last time I came close to this level of stock market investment was in late 2017 when I invested about $600,000 in stocks. Back then, I had just sold my largest rental property in San Francisco and walked away with about $1,780,000 after taxes and fees.
This time, the stock market had already started dipping when I experienced another liquidity event, forcing a tough decision on how to reinvest the proceeds. The process was harrowing and stressful, especially since the original investment had been stable for so many years.
However, to outperform the masses, you must take risks. I want to share the psychological journey of investing a large sum during uncertain times—and how you can overcome your own fear of buying the dip. Let’s get started.
Why Buying The Dip Is So Hard
I’m actually not afraid of buying the dip. I've been doing so since 1997, when I saw my puny stock portfolio decline during the Asian Financial Crisis.
What I fear, though, is buying the dip with a lot more money than I'm used to investing. If I have a lot more money to invest, it usually means I'm already losing a lot of money in my existing stock portfolio.
Although stocks have historically provided an average annual return of around 10%, there are plenty of times when they correct by 20% or more. Just in March 2020, the S&P 500 corrected by 32%.
The worst stock market correction in our lifetime was the 2008-2009 Global Financial Crisis, where the S&P 500 corrected by about 50%. That event was so severe it made me question whether I wanted to stay in finance for the rest of my life.
Given the volatility of stocks, I've always tried to dollar-cost average more aggressively during downturns. DCAing is fundamental to dip buying. But when you're already losing a boatload of money from your existing stock portfolio, it can be terrifying to invest even more of your safe cash.
How To Overcome Your Fear Of Buying The Stock Market Dip
If you're afraid of buying the dip, you're not alone. As I was sharing my dip-buying in my weekly free newsletter, I received regular emails from readers explaining that I was foolish or was ignoring the catastrophic repercussions of the trade wars etc. It was interesting because I have been writing about the risks, including the possibility of stagflation on the horizon.
Here are the steps I took to overcome that fear of buying—they might help you too. For context, I’ve been buying market dips with real income ever since I landed my first job on Wall Street in 1999. Over the years, there have been plenty of corrections, and each one has felt terrible in the moment.
It’s also important to recognize the difference between buying the dip with regular income or cash flow and buying the dip after a major liquidity event—like when a private real estate investment pays out. Reinvesting a large lump sum can be much harder, especially when the original capital performed well. The psychological pressure not to “mess it up” can be intense.
But if you want to build outsized wealth, you must take more calculated risks. Otherwise, you'll end up like everybody else, or worse. Let's get started.
1) Give Some of Your Money To Your Family First
Always spread luck when it comes your way. The more people around you who benefit, the better. And if you ever find yourself down on your luck, maybe those you've helped will return the favor.
After a liquidity event, I transferred $50,000 to my wife's checking account and $25,000 each to my two kids’ custodial investment accounts, Roth IRAs, and 529 plans. While it’s all part of the same family pot, I took comfort in knowing that if I made poor investment decisions with the remaining funds, at least I spread $100,000 of the winnings to the three people I care about the most.
My wife, who’s more risk-averse, invested in a mix of stocks and Treasury bonds. For my kids, I kept things simple with vanilla S&P 500 ETFs in their UTMs and target-date funds in their 529s.
By redistributing money to my loved ones first, I felt a deeper sense of security and purpose. It was similar to the idea of paying yourself first—saving and investing a portion of your income before spending—but viewed through the lens of long-term family planning.
Although my own portfolios were getting hammered by the correction, the least I could do was protect my children's. So I bought the dip aggressively. This is the Provider’s Clock in action. Their portfolios were small enough that every correction could be countered with cash infusions. Psychologically, this gave me the courage to keep investing.
2) Do Something Responsible With the Money Before Investing
In addition to redistributing some of the money to your family, consider using some of it for responsible financial moves before diving into the market.
- Pay down debt: Start with high-interest debt, then work your way down. See the FS-DAIR method to help determine how much money to split between paying down debt and investing.
- Fix what’s broken: Use the money for essential repairs—whether it’s a leaking roof, a failing water heater, or a necessary car repair.
- Invest in your health: Consider spending on things that improve your well-being, like exercise classes, ergonomic work setups, or better nutrition.
For me, I allocated some of my money toward fixing my hot tub. Then I spent $1,025 replacing my car’s heater manifold, which cracked. Knowing I had put my money to good use in other ways made it easier to stomach potential investment losses.
3) Write Out Your Investment Game Plan and Follow It
When investing a significant amount of money, it's crucial to establish an investment game plan. This plan acts as a guiding framework to help you stay disciplined when the stock market is falling apart.
Your plan should outline your target asset allocation, investment time horizon, and a set range for each dip purchase. Additionally, assess whether the market is experiencing a correction (-5% to -19.9%) or if it's likely to enter a bear market with a decline of 20% or more.
If you believe it's just a correction, you can be more aggressive with your dip buying. However, if you anticipate a bear market, be more patient and spread out your purchases to avoid depleting your cash reserves too quickly. Having cash is vital for maintaining enough confidence to invest in a downturn.
After securing my loved ones and handling necessary expenses, I outlined my investment plan. Not only did I write it down, but I also published it in my post, A Simple Three-Step Process To Investing A Lot Of Money Wisely. Then I published, My Bear Market Investment Game Plan. The six hours I spent writing and editing the articles forced me to think deeply for my situation and for readers who face a similar situation.
Once I had my strategy in place, I methodically deployed capital, buying the dip every day the market declined. When I hit my initial allocation limit for the day or week, I reassessed. My goal was to invest 80% or more of my cash into risk assets during the correction.
You don't need to follow your investment game plan perfectly, but having one will help you stay on track. One of the most common mistakes I see is when people lose discipline and buy too much stock too early. You must always have enough cash to take advantage of deeper corrections.
Moved to My Next Investment: Real Estate
After finishing my seven-figure investment in various stocks, I shifted my focus to residential commercial real estate.
I saw the biggest valuation discrepancy between the S&P 500 and commercial real estate, so I started dollar-cost averaging into Fundrise, which is possible due to its$10 minimum. I believe the current oversupply in residential commercial real estate will be absorbed by the end of 2025, leading to upward pressure on rents and property prices in 2026 and beyond.
Despite my preference for value investing, I didn’t allocate as much capital to real estate as I did to stocks. Real estate moves at a much slower pace than stocks—anywhere from 3x to 8x slower in my estimate. While stock prices can correct and recover within weeks, real estate cycles often take years.
This difference in timing influenced my investment strategy: I felt a greater sense of urgency with stocks, which could rebound quickly. Whereas I could afford to be more patient with real estate. In other words, the stock market correction created more investing FOMO and I didn't want to miss out.
4) Adopt the “Go Broke” Mentality To Conquer Your Fear
One of the biggest mental hurdles in buying the dip is the fear that the market will keep dipping. Many people wait for confirmation that the worst is over—but by then, much of the rebound may have already happened.
That’s why I embrace a different mindset: I kiss my money goodbye the moment I invest it.
Instead of viewing the money as mine, I see it as my contribution to the financial future of my wife and kids. The money is now in the hands of the stock market or real estate market gods to do their thing. Will they punish me or reward me? I hope the latter over time.
Of course, losses still sting. But by shifting my perspective, I reduce the emotional weight of each downturn. The less personal the money feels, the easier it is to invest.
And let's be real: it's much easier to invest $10,000 than $1 million. With larger sums, one wrong move can set you back years. Having the right stock exposure is key. That's why every dip you buy can actually help you feel more at ease — you have less money left over to put to work, reducing the pressure of future decisions.
After all, when you're broke, there's only upside!
Remember, scared money doesn't make money. This saying comes from my time playing poker. Whenever I feel hesitant about going all-in, I calculate the odds, and if they're in my favor, I press.
5) Extend Your Investment Time Horizon To At Least 10 Years
I don't know anybody in the history of dip buying who has hung on and lost money. Well, except for those who got margin called. If you can extend your investment time horizon to at least 10 years, you likely have a 95%+ chance of making money. Stretch it to 20 years, and your odds rise to 99.9% based on historical returns.
If you have young children, they can be the easiest motivation to buy the dip. Imagine your kids in their 20s or 30s, talking stocks, real estate, and other investments. If you could travel to that future moment, you'd probably bet everything you have today to secure their financial future.
Before I had kids, I was less aggressive buying the dips. I already had enough money to be satisfied, which is why I left work in the first place.
But now, it's much easier because my kids' investment accounts are smaller, and every dip is a buying opportunity for them. Besides, if I want to help them become financially independent by 25, they/we need to be more aggressive. The robots are coming!
6) Expect to Lose — It’s the Price of Investing
Finally, the worst thing you can do when buying the dip is assume you can’t lose. Anyone who has ever invested in the stock market or taken outsized risks has lost money before—and you will too. Losses are inevitable.
Even if you're holding pocket Aces pre-flop in a heads-up game of Texas No-Limit Hold'em, you'll still lose about 15% of the time. The same goes for investing. That’s why it’s crucial to calculate your potential downside before deploying capital during a dip.
For example, if you invest $100,000 after a 10% correction, understand that corrections can sometimes turn into bear markets. A further 25% drop from your entry point would mean a total 35% drawdown, translating into a $25,000 paper loss.
If you prepare for this possibility ahead of time, the pain may sting less if it actually happens. Plus, you'll be in a better position emotionally and financially to invest more at even lower prices.
Timing The Market Is Tough, Stay Humble
Still think you can time the market? Just look at Mike Wilson, Chief Investment Officer of Morgan Stanley. He was bearish throughout 2023 and 2024, and the S&P 500 posted back-to-back gains of 20%+.
On April 7, 2025, after the S&P 500 had already corrected to 5,000, he predicted another 7%–8% drop to 4,700. Doom was on the horizon! Then, barely a month later on May 12, he appeared on CNBC with bullish conviction, claiming his 6,500 target would be fulfilled. Incredible! Being a Wall Street strategist or economist must be the best job—you can be wrong repeatedly and still get paid handsomely.
But this just goes to show how difficult it is to time the markets correctly. Just when you think you can’t lose, you might lose a boatload. And just when it feels like the sky is darkest, the soft glow of the sun begins to rise. Stay humble.
I fully expect to experience losses from my new investments again. Case in point: I bought ~$50,000 of Nike (NKE) stock between $68–$73 per share earlier in 2025, thinking it was a compelling turnaround story. The stock was at a five-year low, a new CEO was in place, and valuations seemed reasonable. Wrong! Nike cratered to $53 just two months later—a ~30% drop—partly due to the imposition of new tariffs. It looks like it will be dead money for a long while. At least my Air Jordans look sweet.
Don’t Run Out of Cash – Cardinal Rule Of Dip-Buying
One of the toughest parts of buying the dip is running out of cash. It's a form of psychological warfare because you need to accept that your existing investments are losing value while also watching your liquidity shrink with each stock purchase.
When you finally run out of cash, it's like running out of ammunition while being surrounded by zombies. You're vulnerable, exposed, and unable to defend yourself financially. Living paycheck-to-paycheck will snuff out your courage to invest.
That's why it's essential to stay disciplined in how much you buy with each dip. Your emotions may run rampant.
You Will Feel Stressed, Show Yourself Grace
The entire process of buying the dip for six weeks was stressful, especially since part of the time I was up in Lake Tahoe trying to get some ski runs in with my family on vacation. But I stuck to my investment game plan and cadence, trusting that my approach would pay off in the long run.
If you're the partner who doesn't manage the household finances, take a moment to acknowledge the effort of the partner who does. Managing your family's finances can often feel like a full-time job, especially during market downturns when the pressure to make the right decisions intensifies. A little appreciation can go a long way in supporting the person carrying that weight.
There were plenty of moments when my mood soured as the stock market kept dropping with each new aggressive government policy initiative. However, I did my best to shield my family from the stress I was feeling.
When buying the dip and the market keeps dipping, it's crucial to remind yourself that you're trying your best. Nobody can time the market perfectly, but taking action and making thoughtful decisions already puts you ahead of those who sit on the sidelines.
Another Market Correction Is Inevitable
Whether it's a 10% pullback or a 50% crash, nobody can predict it with certainty. However, given the strong historical track record of buying the dip, it's a good idea to always have some idle cash ready to deploy the next time it happens.
So the next time a market decline shakes your confidence, remember:
- Secure your loved ones first.
- Make responsible financial moves before investing.
- Write out your investment plan and stick to it.
- Embrace the “go broke” mentality where every dollar you invest is no longer yours.
- Extend your investment horizon.
- Accept that you will lose money, at least, temporarily as you won't be able to time the bottom.
And most importantly—don’t run out of cash. It is your liquid courage!
Because when the dip comes, you want to be ready to take advantage, while non-personal finance run for the hills. The only way to build outsized wealth is to take more calculated risks. Best of luck with your investment decisions!
Reader Questions and Suggestions
Do you regularly buy the dip? If so, how do you decide how much to invest during a downturn? How do you handle the fear of putting significantly more money to work while watching your existing portfolio decline?
Minimize Investment Volatility With Real Estate
Stock market volatility is a price you pay as an equities investor. If you want to dampen the volatility, diversify into real estate. Real estate is a more stable asset class that generates income and provides utility.
Check out Fundrise, my favorite private real estate investment platform open to all investors. With an investment minimum of only $10, it's easy to diversify into real estate and earn more passive income.
The real estate platform invests primarily in residential and industrial properties in the Sunbelt, where valuations are cheaper and yields are higher. The spreading out of America is a long-term demographic trend. For most people, investing in a diversified fund is the way to go.
I've invested ~$1,000,000 in private real estate so far, with over $300,000 in Fundrise, a long-time sponsor. My goal is to diversify my expensive SF real estate holdings and earn more 100% passive income. I plan to continue dollar-cost investing into private real estate for the next decade.
About Financial Samurai
Founded in 2009, Financial Samurai is the leading independently-owned personal finance site today with about 1 million pageviews a month. Every article is grounded in firsthand experience and real-world knowledge.
I worked in the equities department of Goldman Sachs and Credit Suisse for 13 years before retiring from banking in 2012 at age 34. I'm also the USA Today national bestselling author of my new book, Millionaire Milestones: Simple Steps To Seven Figures.
Join over 60,000 readers and sign up for the free weekly newsletter here. I share real-time investment and economic insights as well as overall personal finance topics. If you’ve been reading my weekly newsletter, you have been following my decision to buy the dip since mid-March through April.
I have followed you for many years and the most challenging thing I have heard you discuss is selling stocks where you have gains since they have no other utility. I have never in my 60 years sold stocks to fund a purchase like a home or car, etc.
It gets to the point of “wealth building”. For us financial folks it has been drilled into us to buy and hold stocks to build wealth, since they always go up over the long term. However, what is wealth building if you never spend it? If I retire with 10 million in assets and is it 60/40 stocks and bonds, the traditional approach is you never sell any of the stocks as that portion provides the “growth” so your overall portfolio keeps up with inflation, etc. But that assumes I also want to pas along at least 10 million or more.
I find that most financial advisors always assume I want to grow my assets forever. Not only that, but they are incentivized to make sure I have as large a portfolio as possible to garner fees from.
Indeed, there’s little point in saving and investing in stocks if you never occasionally sell and use the proceeds to improve your quality of life. Otherwise, we’re just hoarding assets for the sake of accumulating more money—which misses the bigger picture.
One way I’ve found to enjoy our investments guilt-free is by selling stocks to buy another asset that provides both utility and joy. This could be a home, a car, fine wine, art—anything that enhances your lifestyle and might even appreciate in value. Enjoying your wealth while potentially growing it further is the perfect combination.
But perhaps the most important thing we can buy is time. It baffles me how many people have millions in the bank yet continue working jobs they don’t enjoy—trapped by societal pressure, status, or expectations.
Time is the most valuable asset of all. Don’t waste it, folks.
Related: No Point Making Money If You Don’t Spend It
Do you have a suggestion for those in the preservation stage? What should they do during the dip?
It’s hard to say without knowing more details about the person’s financials, goals, and risk tolerance.
However, in general, for those in the preservation stage—typically retirees or near-retirees focused on protecting capital rather than maximizing growth—here’s what to consider during a market dip:
1. Revisit your asset allocation:
Ensure your portfolio is still aligned with your risk tolerance and time horizon. If the dip has thrown your allocation out of balance, consider rebalancing by trimming assets that held up better and buying into those that dipped (e.g., stocks), if appropriate.
2. Focus on income:
Prioritize investments that generate steady income, such as dividends, interest from bonds, or rental property cash flow. This way, you don’t have to sell assets at depressed prices to fund living expenses.
3. Maintain a cash cushion:
Having 1–3 years of expenses in cash or short-term Treasuries helps avoid panic selling and gives time for markets to recover.
4. Avoid making drastic changes:
Resist the urge to go to all cash. Preservation doesn’t mean zero risk—it means strategic, risk-aware management. Market dips are normal and usually temporary.
5. Opportunistically deploy dry powder:
If you have excess cash, consider nibbling into quality assets at lower prices. Preservation doesn’t exclude prudent opportunity.
For me, even though I think I’m in the preservation stage DUPs, I cannot help but buy every correction in the stock market. If the S&P 500 is down 10% or more, I am aggressively buying with the expectations it could ultimately correct by 30%. But I’m going to keep buying all the way down and then back up. It’s almost like an addiction.
Waiting a whole 10 days when the market came roaring back the past two days seems convenient.
It does for those who are not readers of my weekly newsletter. I’ve been writing about buying the dip from mid-March through April. I can add more snapshots or a spreadsheet of more purchases with dates if that helps.
Are you not a subscriber of my newsletter? If not, you are welcome to sign up. It’s free.
On April 9, 2025, I published the post: My Bear Market Investment Game Plan: Adjusting The Strategy. My strategy was to invest 80% of my cash into risk assets, and the remaining 20% into bonds. Check the comments to see the date of publication and discussion.
Here’s what I wrote in the second section of the post on stocks:
2) Stocks (25% of Cash Holdings -> Up To 35%)
I was cautious entering 2025, with the S&P 500’s forward P/E around 22X—well above the historical average of 18X. After two blockbuster years, some mean reversion seemed inevitable.
At the time, I wrote: “Given expensive valuations, I’m only buying in $1,000–$5,000 tranches after every 0.5%–1% decline. The S&P 500 could go back down to 5,000 if valuations mean revert.” I stuck to that plan and started buying after a 3% dip… but now the index is down much more, with the S&P 500 falling to as low as -4,850 from an expected floor of 5,500.
Unfortunately, I was not cautious or patient enough. I’ve been buying the dip to bloody results and it’s been frustrating and painful. That said, I’ve been buying the dip for 26+ years, and over the long run, it’s worked out. It’s in the short term when it always feels the worst. This latest correction reaffirms why I prefer the steadier returns of real estate over the gut-wrenching volatility of stocks.
In light of the pullback, I’m upgrading my stock allocation from 25% to 35%. Valuations are back down to 19 forward earnings and I have hope things won’t get too much worse. That said, there now seems to be a decent probability the S&P 500 could correct to 4,500, or 2 multiples below the long-term forward P/E multiple average of 18. Why pay an average valuation multiple when the government is purposefully sacrificing the stock market for potentially lower rates? A recession seems 70% likely now.
About 27% of our net worth is in public equities, with the goal of getting it up to 30%. I will continue to buy the dip, no matter how depressing it is achieve my asset allocation goal.
Here’s a snapshot of me buying the dip—and losing—until Trump, on April 9, unexpectedly announced a 90-day pause on his higher tariffs for all countries except China. The markets quickly rebounded by 9.5%, one of the biggest single-day moves in history.
I expect continued volatility all year, but am hopeful of a resolution to the trade wars by summer. Further, potentially tax cuts and deregulation will help spur more interest in the stock market in the second half of the year.
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I’ve consistently taken action based on my beliefs. Otherwise, the thoughts would be pointless. This is real life, real money we’re talking about.
What I want to do is inject in readers the courage to take more calculated risks to build more wealth. Otherwise, it’s hard to outperform the average.
Very impressive Sam! I like how this dip got bought by retail and not by the so called pros. I did my usual. Bought every week whether up or down. I did put a little extra in but I couldn’t pull the trigger as big as you did. It doesn’t hurt as much as it used to when the market goes down. Sounds generic, but I was buying on sale.
I’m gonna brag a little. My kid who’s 24 and has invested $25 a week has accumulated 10k in her taxable account. 2 weeks ago she put an extra 2k in VOO. She’s like dad, it’s on sale!
Nice job to your daughter! Great to hear about her habit of investing.
It still hurts a lot to lose money for me bc I focus on it so much, too much, as a PF writer.
This latest correction is a nice wake up call to adjust asset allocation if the decline was bothersome.
Did some rebalancing. Do you have an article for suggestions on allocation based on age? You mentioned you recently came into some cash. Can you elaborate what type of investment this was to help others make similar investments? You usually recommending buying in sequences. What changed that you wanted to do this?
Check out the post: the proper asset allocation of stocks and bonds by age. If you ever need to find anything, type it into the search box in the homepage on the top. Or you can type what you’re looking for in Google and add Financial Samurai.
https://www.financialsamurai.com/the-proper-asset-allocation-of-stocks-and-bonds-by-age/
As an alternative to just holding on to cash to buy dips, what do you think about selling puts? You make more money than in a money market account, and automatically buy stocks when they fall.
Interesting strategy. I’ve always been a bit cautious with options, but if you’re targeting stocks you want to own anyway, it does seem like a more efficient use of cash. How do you manage the risk?
No real risk as long as you don’t sell more than you’re willing to buy. I’ve been selling puts against SPY since last year and pocketing money until last month, when I ended up increasing my S&P 500 exposure, albeit at a premium. But over the long term it seems like a sound strategy.
What is the difference between selling puts and buying options? I never quite got that.
I can understand intuitively why people like to hold cash and then “buy the dip” when there are downturns. HOWEVER, it has been shown to be an inferior investing strategy compared to DCA. Choosing 20-year periods between 1920-2020, dip threshold buying at 10% and 20% underperforms DCA 74% of the time, 30% dip buying underperforms 73% of the time, 40% dip buying underperforms 67% of the time, and 50% underperforms DCA 62% of the time. Although the chances of outperforming DCA increase with the larger dip buying strategy, you are also going to underperform by more on average. Looking at median outcomes, if you employed a 10% buy the dip strategy you would likely underperform DCA by 5% in total, 20% strategy would underperform by 8%, and it gets worse as you increase the threshold to trigger a dip buying opportunity. As Peter Lynch once said “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” Moral of the story is that long term investors are mathematically better off consistently DCA and not holding cash for “buy the dip” moments.
I think of it as a default setting to buy with your cash flow. However, it’s natural to want to pause and build cash during times of uncertainty. Cash feels safe and provides the buffer.
Then, sometimes there are liquidity events like an IPO or a house sale that forces you to make a decision on what to do with the cash.
Do you always just buy with each paycheck and reinvest 100% of any financial windfall in the stock market immediately?
I completely agree that cash feels safe and provides a valuable buffer. Personally, I sleep best when my cash reserves are high, even beyond what most financial experts typically recommend.
That said, I’m a work in progress and haven’t always followed my own advice. During the pandemic, I was sitting on multiple six figures in cash, convinced the housing market would crash and I’d scoop up real estate at a discount. Whoops, got that one wrong! As the market surged, I hesitated to invest the cash in stocks, mainly out of fear and ignorance, so I committed to learning as much as I could about stock market investing.
Eventually, I lump-summed into the market and, for the next several years, consistently invested with each paycheck, keeping very little cash on hand. Now that I’m FIRE, I’ve started to slowly rebuild my cash reserves through semi-passive rental income. I didn’t buy the most recent dip because I have significant upcoming home maintenance expenses that will soak up my cash.
For someone still working and earning regular income, I’d recommend staying fully invested (emergency fund aside), since the math supports that strategy over the long run. But once you’re FIRE’d, peace of mind becomes more important than perfect optimization. Holding substantial cash reserves helps smooth the ride, makes it easier to stay the course during downturns, and lets you sleep better at night. You also then have the luxury of buying the dip if the opportunity presents itself.
Yes! I was also able to add – about 200k between SPY 500-540. Had much more cash available but wanted dry powder in case go lower. Now in that tough area of what to do with that cash now. feels like most the rebound played out but who know, market may hit new highs later this year and never go lower. I will likely return to just DCAing like 20k the first of the month from here on out.
Love it! You are much smarter than me. I started nibbling when the S&P 500 was down to about 5850 as I couldn’t resist. And then I kept on buying all the way down and felt like an idiot for about a month.
You can’t time them all and it’s really hard to put new money to work at this moment.
It’s amazing. We’re almost back to even on the year. It may require first feeling poor to feel rich and appreciative.
LOL. you did well. I was DCAing before the correction so bought about 60k from 5800 to 6100, even though I knew the market was ripe for a correction, and you and others were warning about frothy valuations. Just impossible to get it completely “right.” The hardest part for me is in my investment assets, since I always want dry powder to buy major corrections, how much should it be and where to park it? Thankfully, money market at 4% is giving me something but if and when Powell lowers rates then I may be forced into the market.
Yeah, hooray for money market funds at 4%! But it makes it harder to part with our cash and take more risks as a result.
I guess it’s a good dilemma to have!
From a website few years ago, I found a formula on how much to invest on a dip. They said when it is 85% of max, that’s the time to put the most money, because it doesn’t go below that often. So I did put some money on our recent dip, but only about $10,000. I was saving for a hotel investment my father-in-law is talking about.
Meanwhile, I’ve been investing regularly in Fundrise now since 2021 and I’m still at break even.
“ when it is 85% of max” what does the max mean? Are you saying after a 15% correction?
On Fundrise, commercial real estate has had a difficult time since 2022 for three years, but it’s rebounding now. The credit fund has done well with high rates and so has the venture capital innovation fund. So it depends on what you are investing in.
Investing $10,000 in the dip is better than nothing! We have to enjoy the rebound while it last, because as nothing good lasts forever.
Wow, I’m impressed. Dropping over $1 million in 50 days is mind boggling to me. How fortunate to be able to do that and I can’t even imagine the stress you must have felt especially in these recent insane times in the market.
I always appreciate how honest you are about the emotional side of your various financial and investment decisions. It’s reassuring for me to hear that even experienced investors still feel nervous doing it because I can be a bundle of nerves sometimes with my own investing. I like your strategy of giving some money to family first to stay grounded too. Thoughtful and strategic too. Thanks for sharing your experience. It definitely helps me feel a bit more confident about sticking to my own plan especially when the market is shaky.
Thanks. Investing and staying invested requires immense emotional control, which I find very difficult. My salvation is to write when I’m feeling particularly emotional as it helps provide me an outlet for my frustration, anger, and fear. Fear is what made me create Financial Samurai in 2006!
So in many ways, we can harness our emotions for good. But they can also be debilitating.
The way I see it, the more we can appreciate what we have and feel thankful, the better for investing long term.