The flaky case for buying the dip

The flaky case for buying the dip

While professionals are deeply spooked, retail investors are piling in to US stocks

Retail investors keep buying the dip but what happens when the market doesn’t bounce back?

Retail investors are still rushing to “buy the dip,” but market veterans warn the strategy could fail if share prices keep falling instead of bouncing back. For most of the past 15 years, buying every dip has worked. Brief recessions, including the 2020 downturn and the 2022 bear market, were followed by quick, strong rebounds. Anyone who started investing during that era might think that sell-offs are only temporary. “If, anytime, there’s a sel…