Should Investors “Buy the Dip”?

Описание: Ken Fisher, founder, Executive Chairman, and Co-Chief Investment Officer of Fisher Investments, explains why holding cash to “buy the dip”—a strategy where investors set aside cash to purchase stocks during market downturns—can be counterproductive for long-term investors aiming for stock-like returns.

Historically, on a global scale, stocks rise roughly three periods for every one period they decline, according to Ken. This means that waiting for a "buy the dip" opportunity often leads to missing out on gains during long periods of rising markets.

Additionally, Ken notes that most investors who hold cash for such opportunities hesitate to deploy it when the time comes, as market dips are almost always accompanied by a frightening story that discourages them from deploying it.

Over time, cash loses value to inflation, and it consistently delivers very low returns, making it an expensive choice compared to other investments—especially when waiting for a dip that may not occur, according to Ken.

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Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.