Current Market Dip Strategy

What are your thoughts on the current market in terms of long term investing?

Continue regular investing now, or wait until the market makes an upward trend and make bigger investments at that that point.

Better don’t buy a falling knife, I’d like to see the sideways movement. If Dow breaks 2nd support, all this could fall circa 2000 points more.

Wait a few weeks and see what you can get at a discount. Buy the company not the price. After all the doubts and price drops the fundamentals drive a stock not its price

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these fear drops in market are the best time to get in on companies you normally want but feel are too pricey for their financial situation.

just be sure to pick a stock you are certain is secure and wont actually be negatively affected by the news beyond perhaps slight drops in worker productivity due to workers calling in sick etc. if it has already dropped a lot then you can buy in at any point, but seeing even a little sideways movement can be reassuring you have gotten in low enough. just don’t be surprised if it drops lower again.

For me, every time the market drops I celebrate as its a chance to lower the average cost of my shares while growing the portfolio. my only problem this time is that I used up all my free funds already and payday is 2 days away. LOL

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There is no simple answer to this kind of question. It depends what are your goals/expectations. What is your strategy, what do you see as “long term”, …

Someone like Warren Buffett would tell you to find good companies and stick to them “for the rest of your life”. On the other hand, you could find equally good investors who are very liquid at the moment and are waiting for a recession. Who is right? Both.

Whenever you find yourself asking questions that are directly correlated to your trading/investing try to find out why you have them. Insecurity? Not enough knowledge? Lack of understanding the current market conditions? …

Since this is one of them, I would encourage you to find the root cause of it. I don’t want to discourage anyone, it’s positive that someone is willing to help another investor. Just don’t forget that the average trader (90-95% of people) lose money. Always keep that in mind.
With that being said, you can always use that to your advantage. The vast majority suggested you to do X instead of Y? It’s very likely you should go with the opposite idea, Y. (Far from being a bullet-proof method, just something to think about.)

To answer your question (contradiction myself here since I advised not to listen to random people on the internet but to learn it yourself - maybe take me only half-serious as well)… I think determining where we are “in the bigger picture” shouldn’t be that hard or “risky” at the moment. Just gather some “facts” that have been true for the past 100 years for example and put them together.

Is a rise in price (looking at bigger picture here, -years, decades) always followed by a decline/correction? yes? good!
Can you gather information about the past corrections or recessions? yes? good!
Does this “rise in price” always take (approximately) the same amount of time?
How high have the markets been rising since the last “low point” (%)?
How does this (rise) time compare to the other bull markets that happened in the past?
How about the returns of this bull market, how do they compare to the other times?

Just answering some of the very basic questions should lead you to the conclusion of what is (most likely) going to happen over the next few years.

I hope this leaves you with more inspiring ideas and motivation than confusion.
If your answer is confusion I apologize and suggest a good video just so you haven’t read all of this for no reason. Search on youtube for " How The Economic Machine Works" by Ray Dalio (31min video) - quite basic but good to understand. Might help in understanding the big picture.

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Thanks a lot for a very detailed answer, its given me a lot to think about, and yes that Ray Dalio video is a fantastic resource. Would be particularly useful in schools.
I take it by your name you are of chinese heritage? Are you there now?

No, I am from Europe. I wish though, Japan would sound great :smile:

That just came to my mind when choosing a username.

To (try to) provide some more value, Taoism (where wuwei comes from) was a great concept when I was learning how to trade (the psychology part). And it still is very important to me till this day. I would argue the right attitude/mindset at the given time when trading/investing is 90%, the rest is “knowledge”.
You can google what it means, but I found this very short 1min video which explains it quite ok. (I am not sure if I am allowed to post links - If it isn’t I will remove it).

You are trying to look at the market, but not be attached to it, looking and observing in very detail without fixing yourself to any outcome or scenario no matter how much “energy” you put in (analysis). It’s hard to put it in words, and (“unfortunately”) every individual has to learn the lessons himself to truly understand them.

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you cant do anything after all if you don’t have the mindset for it. for me the market is just 1 aspect of the over all life balance I seek to achieve down the line.

a lot of things with Asian origins tend to study the flow of things rather than the individual building blocks and certainly fits in right at home with investing. I find that knowing a lot about various philosophies and ways of living will assist in making difficult decisions at crucial moments.

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well, for me I have used the dip to strengthen my positions more.

I have some companies ranging from -10% to -20% so I am buying more at a discount.

I wish this downwards trend can go for longer, too many pricey but also nice businesses.

There’s no better time to buy :wink:
If going down even more bothers you, just wait few more weeks to see the marketing moves… the Q1 earnings may be a good moment when many companies will report loses and the prices may suffer a small correction.

historical records show that market dips resulting from medical pandemic fears typically last around 47 days to knock prices down by 9.7%.

this dip has barely begun and we already see some serious discounting. perhaps wait a few days to capitalise on any mobilisations that occur, may get you just a few more shares for the same money than if you fed in daily for the next week.

absolutely never sell, but solid companies will only stand to make you some serious returns if you pick the right investment options. all things correct in due course, make the most of this opportunity.

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I am really hoping for that 9.7 correction @Dao. I feel we can get much more out of this situation. energy sector has been a blood bath for quite some time now, I hope we can bag more sales in the other sectors.

for now I will keep making continuous investments, always like to see green but buying needs to be in the red :slight_smile:

well, OXY has seen 20% down since I got more shares xD

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It is quite easy: if you are on a long term investment and you can bring down your cost average, buy low. Excellent chance.

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yes, I am hoping to lower my average. this is opportunity and my guess is that tomorrow will be much lower than today. I need my paycheck!

It’s the start of a sale. Don’t be that person that rush in and grad anything on sale, buy what you wanted and was planning on buying with that’s best in that list. Buy what you understand.

It’s also a good time to review how defensive your portfolio is and fix the weakness when the time is right in the future.

Solid companies is a must. Microsoft, Apple, Amazon so forth are rock solid investments.

in my case I am looking at companies like; PepsiCo, Realty Income Corp, etc

I would include Unilever, but they have weak numbers right now and the CEO isn’t doing the right things to support its stock price raising. I will just be happy for the dividend to not be messed with and for my average price to decrease as the holding grows.