Buy During This Dip?

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VINNY
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Re: Buy During This Dip?

Post by VINNY » Mon Aug 05, 2019 10:28 pm

The best time to invest in equities like VTSAX is when you have the money. Period

I learned quickly that having "dry powder" (cash on the side) to take advantage of dips is an exercise in futility, because when the sell off happens, you can't predict if there will be another one tomorrow. And as a result you sit on the sidelines trying to predict the bottom.

This is money that should be invested for the long term and as such, don't focus on what the market is doing today but rather on where it will be in 10, 15, 20 years from now.

There was an article by Ben Carlson about what if you had only invested at the Market Peaks. In that article he illustrated, that you still came out ahead over the long term. The key is time in the market.

By investing the money when you have it available, in accordance with your desired allocation, you will eventually feel a lot less stressed about the ups and downs. If you have confidence in our capitalistic system and in the future of this country, buy with confidence knowing that over the long term, the stock market trends upwards.

I keep a small emergency fund of 12K and everything else is 100% VTSAX. Although I didn't have extra cash laying around to invest, I also didn't have the dilemma of trying to decide if today was the day to buy the dip or if tomorrow would be better, if I had that extra cash.

It's a liberating feeling to be fully invested and ignore all the noise! Like Nisiprius illustrated, you just don't have a reliable way of predicting "the right time to buy".

After reading The Simple Path to Wealth by Jim Collins, it gave me the confidence to invest in VTSAX whenever I have the money and hold onto it forever!

mathguy3021
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Re: Buy During This Dip?

Post by mathguy3021 » Mon Aug 05, 2019 10:29 pm

I don't know if this dip will be short lived or if it's the start of a long bear market. No matter what, I will continue to dollar cost average. I generally don't buy dips. I buy only when I see blood in the streets, which is at least a 15% to 20% correction or worse.

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MNGopher
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Re: Buy During This Dip?

Post by MNGopher » Mon Aug 05, 2019 10:36 pm

I threw a little extra cash at VTSAX today.

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FIREchief
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Re: Buy During This Dip?

Post by FIREchief » Tue Aug 06, 2019 2:13 am

mathguy3021 wrote:
Mon Aug 05, 2019 10:29 pm
No matter what, I will continue to dollar cost average.

I buy only when I see blood in the streets, which is at least a 15% to 20% correction or worse.
Aren't these two strategies mutually exclusive? :confused
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Prahasaurus
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Re: Buy During This Dip?

Post by Prahasaurus » Tue Aug 06, 2019 2:33 am

If you purchase monthly, there is nothing to discuss. Keep up the great work. No change necessary. If you are under 50, probably nothing to discuss, as well. Buy, buy, buy, whenever you have the cash. Rebalance as necessary. Business as usual. Ignore the market and spend more time with your wife, husband, children.

If you are sitting on a huge pile of cash for whatever reason (inheritance, performance bonus, lottery win, divorce windfall), and are over 50, then you are a truly brave soul to invest it all now. It may work out for you, but I would think about sitting on the money for a bit. We have major, major economic issues now. The world seems to be entering into a global recession. There is also political upheaval: all of the usual hot spots (China, Russia, Middle East, etc.), but now we have major issues between India and Pakistan (two nuclear powers) over Kashmir that could be reaching a boiling point (seemed to go under the radar yesterday with stocks in free fall). And finally, we are beginning an American election cycle that I believe will be one of the most contentious, radical, and polarizing ever in the history of the USA. One that could have immediate and far reaching impact on multiple industries: healthcare, finance, defense.

Bogle himself rebalanced his portfolio in a very significant way before the dot com crash. He is on record saying he just couldn’t justify those crazy valuations, and hence moved a lot of money out of stocks and into bonds. Was Bogle anti-Bogle? Are we all more Catholic than the Pope?

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dogagility
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Re: Buy During This Dip?

Post by dogagility » Tue Aug 06, 2019 3:11 am

Prahasaurus wrote:
Tue Aug 06, 2019 2:33 am
If you are sitting on a huge pile of cash for whatever reason (inheritance, performance bonus, lottery win, divorce windfall), and are over 50, then you are a truly brave soul to invest it all now.
One can always come up with some bit of news as internal justification for not investing (aka market timing). This is a strategy which leads to lower returns on average.
Taking "risk" since 1995.

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dogagility
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Re: Buy During This Dip?

Post by dogagility » Tue Aug 06, 2019 3:12 am

VINNY wrote:
Mon Aug 05, 2019 10:28 pm
The best time to invest in equities like VTSAX is when you have the money. Period
Sage advice, Vinny.
Taking "risk" since 1995.

Prahasaurus
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Re: Buy During This Dip?

Post by Prahasaurus » Tue Aug 06, 2019 3:42 am

dogagility wrote:
Tue Aug 06, 2019 3:11 am
Prahasaurus wrote:
Tue Aug 06, 2019 2:33 am
If you are sitting on a huge pile of cash for whatever reason (inheritance, performance bonus, lottery win, divorce windfall), and are over 50, then you are a truly brave soul to invest it all now.
One can always come up with some bit of news as internal justification for not investing (aka market timing). This is a strategy which leads to lower returns on average.
On average it does. But that's my point. This is not an average time. Just like the dot com bubble was not an average time.

But, you may say, "How do you know this is not average?" Well, there's the rub...

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dogagility
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Re: Buy During This Dip?

Post by dogagility » Tue Aug 06, 2019 3:52 am

Prahasaurus wrote:
Tue Aug 06, 2019 3:42 am
On average it does. But that's my point. This is not an average time. Just like the dot com bubble was not an average time.

But, you may say, "How do you know this is not average?" Well, there's the rub...
My suggestion is to put a virtual wall in your thought process between investing and anything you consider "news" (financial or otherwise). One side should not interact with the other.
Nobody can predict the short-term machinations of the market. What can be predicted well is that the market will increase over long time periods (>10 years). If this is your investing time horizon, invest now according to your desired AA.
Taking "risk" since 1995.

Prahasaurus
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Re: Buy During This Dip?

Post by Prahasaurus » Tue Aug 06, 2019 4:08 am

dogagility wrote:
Tue Aug 06, 2019 3:52 am
Prahasaurus wrote:
Tue Aug 06, 2019 3:42 am
On average it does. But that's my point. This is not an average time. Just like the dot com bubble was not an average time.

But, you may say, "How do you know this is not average?" Well, there's the rub...
My suggestion is to put a virtual wall in your thought process between investing and anything you consider "news" (financial or otherwise). One side should not interact with the other.
Nobody can predict the short-term machinations of the market. What can be predicted well is that the market will increase over long time periods (>10 years). If this is your investing time horizon, invest now according to your desired AA.
I generally agree. But there are times - very rare to be sure! - when you strongly believe things are just not "normal," however defined. It may be because of a technology bubble, a housing bubble, or perhaps political turmoil combined with incompetence at the highest level on such a massive scale that you just cannot expect things to end well...

On a related note, I see Buffet is sitting on the largest cash pile in his company's history, over 122 billion USD. So strange a long term investor - who is on record saying he hates holding cash - would do that. Unless, of course, he can't justify investing in the market at current prices, for whatever reason.

HawkeyePierce
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Re: Buy During This Dip?

Post by HawkeyePierce » Tue Aug 06, 2019 5:07 am

My RSUs were deposited in my account Monday morning and I forgot to log in to sell them. Kicking myself over taking a 5% bath on that.

Prahasaurus
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Re: Buy During This Dip?

Post by Prahasaurus » Tue Aug 06, 2019 5:31 am

HawkeyePierce wrote:
Tue Aug 06, 2019 5:07 am
My RSUs were deposited in my account Monday morning and I forgot to log in to sell them. Kicking myself over taking a 5% bath on that.
Focus on the positive. By selling now, you may have made 20% in 4 months. :mrgreen:

mathguy3021
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Re: Buy During This Dip?

Post by mathguy3021 » Tue Aug 06, 2019 7:07 am

FIREchief wrote:
Tue Aug 06, 2019 2:13 am
mathguy3021 wrote:
Mon Aug 05, 2019 10:29 pm
No matter what, I will continue to dollar cost average.

I buy only when I see blood in the streets, which is at least a 15% to 20% correction or worse.
Aren't these two strategies mutually exclusive? :confused
When I say dollar cost average I am talking about monthly no matter what the market is doing. If I end up buying dips, it's not because I reacted to market conditions. That is different from choosing to move money from cash or bonds to stocks because the market dipped a few percent. I only choose to move money when the correction is large enough. To clarify my previous statement, "I only choose to buy when I see blood in the streets, which is at least a 15 to 20% correction or worse." This action is separate from dollar cost averaging which is NOT choosing to buy dips.

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Wiggums
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Re: Buy During This Dip?

Post by Wiggums » Tue Aug 06, 2019 7:33 am

Beensabu wrote:
Mon Aug 05, 2019 9:31 pm
This is not the dip you're looking for.
+1

JimmyD
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Re: Buy During This Dip?

Post by JimmyD » Tue Aug 06, 2019 7:43 am

We invest each month's cash flow into our taxable account and due to fund transfer lag times, we ended up putting a sizable chunk into VTIAX and VTSAX yesterday which obviously worked out nicely.

Miguelito
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Re: Buy During This Dip?

Post by Miguelito » Tue Aug 06, 2019 8:19 am

I am always hesitant to buy at market highs. I had some money to invest a couple of weeks ago, but decided to wait a bit from market highs and then until after our vacation. We got back this past weekend and I happened to get a ~6% discount by waiting.I only invested 1/3 of the funds I had to invest though, just in case it keeps falling.

Yes, I am very bad about market timing when it comes to buying in. I usually invest in the dips. That said, the money that is invested has an aggressive AA and we plan on riding out the market ups and downs long term.

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Sandtrap
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Re: Buy During This Dip?

Post by Sandtrap » Tue Aug 06, 2019 8:24 am

Dip Recovery?

Wall Street Journal.
Partial Market Recovery.
"Turnaround Tuesday".
https://www.wsj.com/articles/welcome-to ... 1565080984
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unclescrooge
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Re: Buy During This Dip?

Post by unclescrooge » Tue Aug 06, 2019 9:03 am

KlangFool wrote:
Mon Aug 05, 2019 2:20 pm
OP,

I am buying because today is my annual rebalancing day.

KlangFool
Happy Rebal Day!
:beer

MI_bogle
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Re: Buy During This Dip?

Post by MI_bogle » Tue Aug 06, 2019 9:06 am

Wiggums wrote:
Tue Aug 06, 2019 7:33 am
Beensabu wrote:
Mon Aug 05, 2019 9:31 pm
This is not the dip you're looking for.
+1
We don't serve droids... i mean market timers here

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birdog
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Re: Buy During This Dip?

Post by birdog » Tue Aug 06, 2019 9:57 am

BUY BUY BUY!!! All the time, BUY BUY BUY!!!

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MNGopher
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Re: Buy During This Dip?

Post by MNGopher » Tue Aug 06, 2019 10:07 am

mathguy3021 wrote:
Tue Aug 06, 2019 7:07 am
FIREchief wrote:
Tue Aug 06, 2019 2:13 am
mathguy3021 wrote:
Mon Aug 05, 2019 10:29 pm
No matter what, I will continue to dollar cost average.

I buy only when I see blood in the streets, which is at least a 15% to 20% correction or worse.
Aren't these two strategies mutually exclusive? :confused
When I say dollar cost average I am talking about monthly no matter what the market is doing. If I end up buying dips, it's not because I reacted to market conditions. That is different from choosing to move money from cash or bonds to stocks because the market dipped a few percent. I only choose to move money when the correction is large enough. To clarify my previous statement, "I only choose to buy when I see blood in the streets, which is at least a 15 to 20% correction or worse." This action is separate from dollar cost averaging which is NOT choosing to buy dips.
I get what you are saying and do pretty much the same. For me tax advantaged purchases are maxed automatically, Roth IRA at the beginning of the year and tax deferred 403B every pay check. Any excess cash after that I try to time with the market dips. It doesn't always work and sometimes after a few months I just end up buying at whatever the price is.

alfaspider
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Re: Buy During This Dip?

Post by alfaspider » Tue Aug 06, 2019 10:14 am

Yes.

I buy the dips, I buy the ups, I buy the sideways. I TLH big dips.

rasta
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Re: Buy During This Dip?

Post by rasta » Tue Aug 06, 2019 10:36 am

no way i would buy into this chart pattern, too risky.

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FIREchief
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Re: Buy During This Dip?

Post by FIREchief » Tue Aug 06, 2019 12:44 pm

Prahasaurus wrote:
Tue Aug 06, 2019 2:33 am
If you are under 50, probably nothing to discuss

We have major, major economic issues now. The world seems to be entering into a global recession. There is also political upheaval: all of the usual hot spots (China, Russia, Middle East, etc.), but now we have major issues between India and Pakistan (two nuclear powers) over Kashmir that could be reaching a boiling point (seemed to go under the radar yesterday with stocks in free fall). And finally, we are beginning an American election cycle that I believe will be one of the most contentious, radical, and polarizing ever in the history of the USA. One that could have immediate and far reaching impact on multiple industries: healthcare, finance, defense.
For those over 50, that second paragraph sounds a whole lot like "same as it ever was...."

We had "major, major economic issues" in the 1970's. What we have now is at worst a flesh wound, and likely more just a minor rash.

Usual hot spots.... (yep, usual)

India and Pakistan - that's actually been one of the usual concerns for many, many years.

American election cycle......Yawn!! :P

The election cycle concerns me the least, because the end results won't make any difference. As long as we remain polarized, not much will happen. It's just math and an understanding of our legislative process (i.e. current law, which is acceptable for discussion).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

StealthRabbit
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Re: Buy During This Dip?

Post by StealthRabbit » Tue Aug 06, 2019 7:39 pm

for 're-entering' ... (Extra cash / rebalance / putting my 'profit taking peanuts' back in the game...)
Looking for a little more drop ~10% + before shopping for more. + watching volumes on the buy side. (There are smarter people than me leading a buying trend)

Was a crazy good thing to nab some AAPL in Dec and dump on a '6% up in one day' last week) +40% (what once equaled a yr wages) Just the 'play money' now. 15+ yrs retired, Gotta keep income LOW until age 65!

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Meg77
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Re: Buy During This Dip?

Post by Meg77 » Wed Aug 07, 2019 9:16 am

bck63 wrote:
Mon Aug 05, 2019 3:28 pm
Meg77 wrote:
Mon Aug 05, 2019 2:01 pm
We could see another 5-10% drop before it comes back up.
How do you know this? What about a 10-20% drop? Or a 20-30% drop? How's about 40-50%? There is absolutely no guarantee, nor any reason to believe, they market will "come back up" after a 5-10% drop.
I didn't say I know this; I said it could happen. And yes I agree, a 20-50% drop could also happen - in which case I'd move even more cash to stocks. And it's true, there's a chance the market may never recover after a big drop, or won't in my lifetime. It's happened in other countries. But I don't know of any alternative than to keep investing in the stock market, buying every month and buying even more if I can afford to any time there is a dip in the markets. I also buy real estate and hold a decent cash cushion, but otherwise to my knowledge there is nothing else to do besides spend less than I earn and invest the difference in the markets we have available. If that strategy fails and the Great Depression II or World War III impoverishes us all, I'll have the satisfaction of knowing I did "all the right things" as I toil away with everyone else to survive however I can.
"An investment in knowledge pays the best interest." - Benjamin Franklin

MathIsMyWayr
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Re: Buy During This Dip?

Post by MathIsMyWayr » Wed Aug 07, 2019 9:35 am

I regret no matter whether I hold on to money waiting for a large dip or invest now. Which is worse? Too much thinking does't do any good.

Lee_WSP
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Re: Buy During This Dip?

Post by Lee_WSP » Wed Aug 07, 2019 12:11 pm

MathIsMyWayr wrote:
Wed Aug 07, 2019 9:35 am
I regret no matter whether I hold on to money waiting for a large dip or invest now. Which is worse? Too much thinking does't do any good.
:sharebeer Yup. :beer

bck63
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Re: Buy During This Dip?

Post by bck63 » Wed Aug 07, 2019 1:11 pm

Meg77 wrote:
Wed Aug 07, 2019 9:16 am
bck63 wrote:
Mon Aug 05, 2019 3:28 pm
Meg77 wrote:
Mon Aug 05, 2019 2:01 pm
We could see another 5-10% drop before it comes back up.
How do you know this? What about a 10-20% drop? Or a 20-30% drop? How's about 40-50%? There is absolutely no guarantee, nor any reason to believe, they market will "come back up" after a 5-10% drop.
I didn't say I know this; I said it could happen. And yes I agree, a 20-50% drop could also happen - in which case I'd move even more cash to stocks. And it's true, there's a chance the market may never recover after a big drop, or won't in my lifetime. It's happened in other countries. But I don't know of any alternative than to keep investing in the stock market, buying every month and buying even more if I can afford to any time there is a dip in the markets. I also buy real estate and hold a decent cash cushion, but otherwise to my knowledge there is nothing else to do besides spend less than I earn and invest the difference in the markets we have available. If that strategy fails and the Great Depression II or World War III impoverishes us all, I'll have the satisfaction of knowing I did "all the right things" as I toil away with everyone else to survive however I can.
I stand corrected and agree with everything you said above. Despite all the uncertainty, I too just keep buying. What else are we to do? Keep it under a mattress? This will be a nothing blip, I hope and believe, and the world economy will hopefully (likely?) keep growing.

And you're right. If the "you-know-what" hits the fan, we'll all be in the mess together. Maybe your four-leaf clover will bring us all luck. :-) Sorry for misinterpreting your last post.

cherijoh
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Re: Buy During This Dip?

Post by cherijoh » Wed Aug 07, 2019 1:27 pm

RetiredAL wrote:
Mon Aug 05, 2019 9:01 pm
Outright buy, no.

However the annual Roth Conversion could get done early this year.
I did an extra large Roth conversion last December. I'm debating doing another one this year, but the market would need to be in true correction territory.

02nz
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Re: Buy During This Dip?

Post by 02nz » Wed Aug 07, 2019 1:33 pm

I've only rebalanced. It's tempting to engage in some mild market-timing (as I did on Dec 24 and 26 - worked out very well), but I probably shouldn't push my luck too much.

WhiteMaxima
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Re: Buy During This Dip?

Post by WhiteMaxima » Wed Aug 07, 2019 2:29 pm

DCA or rebalance. Take your emotion away from invest.

Lee_WSP
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Re: Buy During This Dip?

Post by Lee_WSP » Wed Aug 07, 2019 3:06 pm

WhiteMaxima wrote:
Wed Aug 07, 2019 2:29 pm
DCA or rebalance. Take your emotion away from invest.
IMO DCA is the emotional way to invest. The optimal way to invest is all in as the money becomes available.

Based on expected returns.

livesoft
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Re: Buy During This Dip?

Post by livesoft » Wed Aug 07, 2019 3:10 pm

This dip is over, so now on to the next one.

Note: End of dip is not when stocks recover to pre-dip levels. A new dip could happen anytime, too.
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Meg77
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Re: Buy During This Dip?

Post by Meg77 » Thu Aug 08, 2019 3:40 pm

bck63 wrote:
Wed Aug 07, 2019 1:11 pm
Meg77 wrote:
Wed Aug 07, 2019 9:16 am
bck63 wrote:
Mon Aug 05, 2019 3:28 pm
Meg77 wrote:
Mon Aug 05, 2019 2:01 pm
We could see another 5-10% drop before it comes back up.
How do you know this? What about a 10-20% drop? Or a 20-30% drop? How's about 40-50%? There is absolutely no guarantee, nor any reason to believe, they market will "come back up" after a 5-10% drop.
I didn't say I know this; I said it could happen. And yes I agree, a 20-50% drop could also happen - in which case I'd move even more cash to stocks. And it's true, there's a chance the market may never recover after a big drop, or won't in my lifetime. It's happened in other countries. But I don't know of any alternative than to keep investing in the stock market, buying every month and buying even more if I can afford to any time there is a dip in the markets. I also buy real estate and hold a decent cash cushion, but otherwise to my knowledge there is nothing else to do besides spend less than I earn and invest the difference in the markets we have available. If that strategy fails and the Great Depression II or World War III impoverishes us all, I'll have the satisfaction of knowing I did "all the right things" as I toil away with everyone else to survive however I can.
I stand corrected and agree with everything you said above. Despite all the uncertainty, I too just keep buying. What else are we to do? Keep it under a mattress? This will be a nothing blip, I hope and believe, and the world economy will hopefully (likely?) keep growing.

And you're right. If the "you-know-what" hits the fan, we'll all be in the mess together. Maybe your four-leaf clover will bring us all luck. :-) Sorry for misinterpreting your last post.
Ha, no worries. I'll take all the luck I can get! I didn't take any offense and apologize if my response sounded snarky. :beer
"An investment in knowledge pays the best interest." - Benjamin Franklin

alfaspider
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Re: Buy During This Dip?

Post by alfaspider » Thu Aug 08, 2019 3:45 pm

Lee_WSP wrote:
Wed Aug 07, 2019 3:06 pm
WhiteMaxima wrote:
Wed Aug 07, 2019 2:29 pm
DCA or rebalance. Take your emotion away from invest.
IMO DCA is the emotional way to invest. The optimal way to invest is all in as the money becomes available.

Based on expected returns.
Well, typically people get money from a salary, so they are one in the same. They put money in as it becomes available, which is over time.

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Sandtrap
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Re: Buy During This Dip?

Post by Sandtrap » Thu Aug 08, 2019 4:02 pm

livesoft wrote:
Wed Aug 07, 2019 3:10 pm
This dip is over, so now on to the next one.

Note: End of dip is not when stocks recover to pre-dip levels. A new dip could happen anytime, too.
+1
One recent financial news headline, "dips happen often just before a crash". . . . .
Who knows. . . ?

j
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bck63
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Re: Buy During This Dip?

Post by bck63 » Thu Aug 08, 2019 4:32 pm

Meg77 wrote:
Thu Aug 08, 2019 3:40 pm
bck63 wrote:
Wed Aug 07, 2019 1:11 pm
Meg77 wrote:
Wed Aug 07, 2019 9:16 am
bck63 wrote:
Mon Aug 05, 2019 3:28 pm
Meg77 wrote:
Mon Aug 05, 2019 2:01 pm
We could see another 5-10% drop before it comes back up.
How do you know this? What about a 10-20% drop? Or a 20-30% drop? How's about 40-50%? There is absolutely no guarantee, nor any reason to believe, they market will "come back up" after a 5-10% drop.
I didn't say I know this; I said it could happen. And yes I agree, a 20-50% drop could also happen - in which case I'd move even more cash to stocks. And it's true, there's a chance the market may never recover after a big drop, or won't in my lifetime. It's happened in other countries. But I don't know of any alternative than to keep investing in the stock market, buying every month and buying even more if I can afford to any time there is a dip in the markets. I also buy real estate and hold a decent cash cushion, but otherwise to my knowledge there is nothing else to do besides spend less than I earn and invest the difference in the markets we have available. If that strategy fails and the Great Depression II or World War III impoverishes us all, I'll have the satisfaction of knowing I did "all the right things" as I toil away with everyone else to survive however I can.
I stand corrected and agree with everything you said above. Despite all the uncertainty, I too just keep buying. What else are we to do? Keep it under a mattress? This will be a nothing blip, I hope and believe, and the world economy will hopefully (likely?) keep growing.

And you're right. If the "you-know-what" hits the fan, we'll all be in the mess together. Maybe your four-leaf clover will bring us all luck. :-) Sorry for misinterpreting your last post.
Ha, no worries. I'll take all the luck I can get! I didn't take any offense and apologize if my response sounded snarky. :beer
It didn't at all! A good day in the market today. I'd be better off not looking though. :sharebeer

Lee_WSP
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Re: Buy During This Dip?

Post by Lee_WSP » Thu Aug 08, 2019 5:40 pm

alfaspider wrote:
Thu Aug 08, 2019 3:45 pm
Lee_WSP wrote:
Wed Aug 07, 2019 3:06 pm
WhiteMaxima wrote:
Wed Aug 07, 2019 2:29 pm
DCA or rebalance. Take your emotion away from invest.
IMO DCA is the emotional way to invest. The optimal way to invest is all in as the money becomes available.

Based on expected returns.
Well, typically people get money from a salary, so they are one in the same. They put money in as it becomes available, which is over time.
It seems to be used to denote two strategies, the invest as you go and the break up a lump sum into smaller chunks.

The invest as you go is not a DCA strategy in my book as you aren't averaging anything.

Trader Joe
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Joined: Fri Apr 25, 2014 6:38 pm

Re: Buy During This Dip?

Post by Trader Joe » Thu Aug 08, 2019 5:45 pm

Milujo wrote:
Mon Aug 05, 2019 1:44 pm
With stocks plummeting today, is now a good time to add excess savings money to my three-fund portfolio? Overall, we don't try to time the market, but when the market dropped in December 2018, I added a few thousand which has paid off. I don't plan to ever sell when stocks seem too high to last, but when stocks plummet and I have extra savings, is it wise to purchase stock then? Thanks.
I invest whenever I have the money to invest. I never sell.

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dogagility
Posts: 635
Joined: Fri Feb 24, 2017 6:41 am

Re: Buy During This Dip?

Post by dogagility » Thu Aug 08, 2019 5:56 pm

Trader Joe wrote:
Thu Aug 08, 2019 5:45 pm
Milujo wrote:
Mon Aug 05, 2019 1:44 pm
With stocks plummeting today, is now a good time to add excess savings money to my three-fund portfolio? Overall, we don't try to time the market, but when the market dropped in December 2018, I added a few thousand which has paid off. I don't plan to ever sell when stocks seem too high to last, but when stocks plummet and I have extra savings, is it wise to purchase stock then? Thanks.
I invest whenever I have the money to invest. I never sell.
Yup. As another Boglehead wrote today, cash is the worst performing asset class.
Taking "risk" since 1995.

HawkeyePierce
Posts: 734
Joined: Tue Mar 05, 2019 10:29 pm
Location: Colorado

Re: Buy During This Dip?

Post by HawkeyePierce » Thu Aug 08, 2019 6:01 pm

I received a bonus today and dumped it all into VTSAX in my taxable account, because that's always what I do with new investable cash. I haven't looked at how the market did today.

I don't bother rebalancing with new money because most of my new money is on auto-pilot and I don't feel like messing with the proportions all the time, so I just do it quarterly. If my VTSAX purchase today pushed me out of whack, I'll sell some stock in my 401k and buy more bonds during my next rebalance.

RetiredAL
Posts: 453
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Buy During This Dip?

Post by RetiredAL » Thu Aug 08, 2019 6:35 pm

cherijoh wrote:
Wed Aug 07, 2019 1:27 pm
RetiredAL wrote:
Mon Aug 05, 2019 9:01 pm
Outright buy, no.

However the annual Roth Conversion could get done early this year.
I did an extra large Roth conversion last December. I'm debating doing another one this year, but the market would need to be in true correction territory.
I concur. This last week is basically still noise.

I did my normal conversion amount last Dec, which is also my normal month.

I figure a 10% market drop only nets me about $75 $175 saving for each additional $10,000 of conversion -- 60/40, 12% Fed tax paid by conversion $, and not near a SS taxation spike point.
Last edited by RetiredAL on Thu Aug 08, 2019 7:23 pm, edited 1 time in total.

tesuzuki2002
Posts: 854
Joined: Fri Dec 11, 2015 12:40 pm

Re: Buy During This Dip?

Post by tesuzuki2002 » Thu Aug 08, 2019 7:05 pm

ponyboy wrote:
Mon Aug 05, 2019 1:46 pm
If you have the extra coin, go for it. Its not the boglehead way and many wouldnt encourage it...but with a 5-6% drop in the past couple days...have at it.

I randomly put an order in on friday and it didnt get executed yet or whatever they call that. Guess ill be buying in the dip too.

Do you just randomly put orders in or do you have an IPS with a structured process for investing?

tesuzuki2002
Posts: 854
Joined: Fri Dec 11, 2015 12:40 pm

Re: Buy During This Dip?

Post by tesuzuki2002 » Thu Aug 08, 2019 7:06 pm

If you have some cash around you could buy on EVERY dip... I mean it's not going to hurt anything.. just stick with your asset allocation..

sarabayo
Posts: 330
Joined: Fri Jun 29, 2018 6:59 pm

Re: Buy During This Dip?

Post by sarabayo » Thu Aug 08, 2019 7:10 pm

finagle wrote:
Mon Aug 05, 2019 7:37 pm
Dip? What dip?

My next set point for extra unscheduled funds in is djia = 20,000.

But glad my 401k contributions are going in this week ($740, which is $19k divide by 26 checks)
Does your asset allocation involve a position in a fund that tracks the DJIA? If yes, why aren't you using something more diversified like total US stock market, or at least the S&P 500? If no, then why do you have a set point based on the DJIA?

Lee_WSP
Posts: 1208
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Buy During This Dip?

Post by Lee_WSP » Thu Aug 08, 2019 9:37 pm

tesuzuki2002 wrote:
Thu Aug 08, 2019 7:06 pm
If you have some cash around you could buy on EVERY dip... I mean it's not going to hurt anything.. just stick with your asset allocation..
My auto investments do just that. Except they also invest in every peak..... so pretty much all of them for the past three months or so were negative last I checked.

alfaspider
Posts: 2174
Joined: Wed Sep 09, 2015 4:44 pm

Re: Buy During This Dip?

Post by alfaspider » Fri Aug 09, 2019 6:57 am

Lee_WSP wrote:
Thu Aug 08, 2019 5:40 pm
alfaspider wrote:
Thu Aug 08, 2019 3:45 pm
Lee_WSP wrote:
Wed Aug 07, 2019 3:06 pm
WhiteMaxima wrote:
Wed Aug 07, 2019 2:29 pm
DCA or rebalance. Take your emotion away from invest.
IMO DCA is the emotional way to invest. The optimal way to invest is all in as the money becomes available.

Based on expected returns.
Well, typically people get money from a salary, so they are one in the same. They put money in as it becomes available, which is over time.
It seems to be used to denote two strategies, the invest as you go and the break up a lump sum into smaller chunks.

The invest as you go is not a DCA strategy in my book as you aren't averaging anything.
You are averaging the purchase price of the equities you purchase. If I buy a bit of VTI with every paycheck, I am altering my average purchase price of VTI. You could instead save in cash until a “buying opportunity” and put it all in at once.

Dandy
Posts: 6001
Joined: Sun Apr 25, 2010 7:42 pm

Re: Buy During This Dip?

Post by Dandy » Fri Aug 09, 2019 7:34 am

I think, as a general idea it is ok to buy some equities when there is a significant dip. I would stay within the rebalancing guidelines e.g. if you have a 60/40 allocation and would rebalance when equities are below 57% or above 63% and are currently at 60 - buy on a big dip as long as you end up 63% or below.

This makes more sense the more investing years you have left. Equities, over time are expected to grow -- the more time you are going to be in equities the more likely buying on a major dip will be ok. My caution would be that you may start to become overly confident in investing and not stick to your well thought out IPS. I would also not advise making major dollar investments on dips. That is why on the rare occasion that I would buy on dips I would make sure to stay within my rebalancing plan. As a get farther into retirement my buy on dips will become even rarer. I passed on the most recent dip.

StandingRock
Posts: 342
Joined: Sat Feb 02, 2019 6:54 pm

Re: Buy During This Dip?

Post by StandingRock » Fri Aug 09, 2019 7:45 am

If you buy every dip you might not have enough money left over to buy food.

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