Blood was in the water, but I was buying. The market was tanking in March 2020 and due to a bonus from work, I was flush with cash. It worked beautifully… this time.
The market was pumping, everyone was at all time highs, but I was buying. It was January 2021 and I was loading up. Turned out this was the top and I made some tough purchases.
Dips can last for years, even decades. If this scares you, don’t buy the dip. Just DCA. Not everyone has the time or stomach to watch the movements of the market. In fact, that is normal. BUT buying the dip is fun and I think you can make a little extra money off of it when people are acting like the world is ending. Market cycles do exist, they are just tough to time. A key tool to tell the part of the market cycle is the fear you see in the market.
My recommendation is to always be buying, but buy even more when fear is high and blood is in the water. While everyone else is losing money in fear, you are adding more and more. What if the dip keeps dipping? You buy more! Averaging down in great companies just means you own more of the great companies.
Part of the beauty of being a stock picker is that every stock or asset isn’t perpetually in a bubble. Some will be at times, but deals are always available. It is your job to find them. Or at least to wait them out (if you choose index funds). Or if you want something easy, DCA into index funds. Either way, never stop buying!