Author warns against blindly buying every dip, arguing the strategy's recent success rests on a small sample and that real bear markets take years to recover.
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This isn't about the potential outcome of current macro events on the stock market, this is more so about the people blindly spamming buy the dip.
My main concern with this advise is that their basis for the argument stems from the April dump where dip buying did in fact work at that time. But, my question is how do you extrapolate that to every dip?
The main concern I have with this idea is the small sample size and the lack of time since, it has not even been a year yet since the April drop (and other minor corrections since).
It seems like majority of the subreddit (or the loudest members) have not experienced a real bear market before, which I think is supported by the flood of bear posts every time the Nasdaq drops >.5%. But historically in a real bear market, recovery takes years, not days or weeks.
Dotcom high: March 2000 \~5,048
Next high: **June 2015 \~ 5,137**
**15 years to recovery**
A lot of stocks still have not recovered since covid, even though the focus on the next big tech wave has shifted.
This is not market advise & I'm firm believer that retail has not impact on highly liquid stocks, but I would be weary of blindly buying the dip. Don't end up trying to catch a falling knife.
Quantitative research on buying the dip:
[https://www.aqr.com/Insights/Research/Alternative-Thinking/Hold-the-Dip](https://www.aqr.com/Insights/Research/Alternative-Thinking/Hold-the-Dip)