Buying the dip or….

[ShokWaveRider]

Folks are winning in this market by buying an ETF when the S&P is down XXX hundred points, then selling it at the end of the day when it is back again. It is crazy. Not in it myself, don't need to be.

[Car-Guy]

Quote:

Originally Posted by ShokWaveRider Folks are winning in this market by buying an ETF when the S&P is down XXX hundred points, then selling it at the end of the day when it is back again. It is crazy. Not in it myself, don't need to be.

Works with single stocks too, in many cases. I don't "need it" either but it's fun to "play". I certainly would not recommend using money that's needed to support a lifestyle/retirement... And yes it's really crazy right now... I guess in a small way, I'm contributing to the madness.

[NW-Bound]

Quote:

Originally Posted by Car-Guy Works with single stocks too, in many cases. I don't "need it" either but it's fun to "play". I certainly would not recommend using money that's needed to support a lifestyle/retirement... And yes it's really crazy right now... I guess in a small way, I'm contributing to the madness.

If you buy low then sell high, you counteract the madness and reduce the volatility.

Imagine what happens if there are no buyers and investors are clamoring to get out of stocks. How low the price would go?

By the same token, it's really the lack of sellers that propelled meme stocks "to the moon", as the reddit mob wanted to see.

You need both buyers and sellers in any market in order for the price to seek a rational pricing level.

PS. I am not a day trader, mainly because I am not good at it. I prefer to hold a stock forever, but will buy or sell if I think the pricing is not reasonable.

[Car-Guy]

Quote:

Originally Posted by NW-Bound If you buy low then sell high, you counteract the madness and reduce the volatility.

So I guess I'm actually counteracting the madness since I'm certainly trying to buy low and sell high with my swing trades. Works "most" of the time if I follow the rules I've set for myself... In full disclosure/truth, I would have made more money in 2021 if I would have just bought and held but it wouldn't have been nearly as much fun.

[NW-Bound]

Absolutely do not buy high/sell low. You are really adding to the madness then.

It's better to hold still if you can't do it right.

Quote:

Originally Posted by Car-Guy .. In full disclosure/truth, I would have made more money in 2021 if I would have just bought and held but it wouldn't have been nearly as much fun.

In hindsight, the market might have been touching bubble territory in 2021. So, your selling was not harmful even if you did not make as much money.

Any time I bought back at a lower price than I sold at, I called it a success, even if I then lost money after buying back.

[Lsbcal]

Question for some of you buying the dip for very short term gains/losses, what percentage of your portfolio are you committing to this?

My guess is it is a very low percentage and amounts to a low incremental gain or loss.

[NW-Bound]

Yes, the short term gain is small with respect to the whole stash, but the satisfaction is very real.

[Chuckanut]

Quote:

Originally Posted by Lsbcal Question for some of you buying the dip for very short term gains/losses, what percentage of your portfolio are you committing to this? My guess is it is a very low percentage and amounts to a low incremental gain or loss.

When I bought at a dip (like in 2008) it was a very small percentage - perhaps 2% max. I doubt if it made much of a difference other than giving me some bragging rights.

However, toss in all the dip buying I automatically did when dollar cost averaging into the market over 30+ years and I suppose it probably did make a significant difference.

[audreyh1]

Quote:

Originally Posted by Fermion Depends if the helicopter is going to drop money again. That changes everything.

The Fed is strongly signaling the opposite- that they will start taking the punch bowl away soon, which is what started the tech sell off and rising interest rates.

As of Friday I was only off 2% from my allocation, and I want to be 5% off to do any rebalancing, so I’ll be waiting.

[Lsbcal]

Quote:

Originally Posted by Chuckanut When I bought at a dip (like in 2008) it was a very small percentage - perhaps 2% max. I doubt if it made much of a difference other than giving me some bragging rights. However, toss in all the dip buying I automatically did when dollar cost averaging into the market over 30+ years and I suppose it probably did make a significant difference.

My biggest buy on the dip was coming out of the 2009 disaster in June 2009. But that was a rebalance and after a trend up. Not really a dip buy.

[Car-Guy]

Quote:

Originally Posted by Lsbcal Question for some of you buying the dip for very short term gains/losses, what percentage of your portfolio are you committing to this? My guess is it is a very low percentage and amounts to a low incremental gain or loss.

Maybe 20% but in my case my short term gains covered my 2021 base living expenses. But 2021 was easy. So far 2022 has been great too but I realize I've been pretty lucky, so far.