--- title: '‘Buy the Dip’: Why the Investing Strategy Is Making a Comeback' description: Is "buying the dip" a smart investing strategy? So far in 2023, "buy the dip" is proving successful, according to new data. authors: - name: Brenden Rearick role: Reporter url: https://money.com/author/brenden-rearick/ bio: Brenden Rearick is a former news reporter at Money with nearly four years of experience covering investing and other personal finance topics. education: University of Pittsburgh, BA at_money_since: 2023 articles: 133 covers: - Investing - Banking - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology former_staff: true editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-04-27T14:36:45.000Z' modified: '2023-11-14T19:36:44.000Z' section: Investing tags: - News - stocks word_count: 650 canonical: https://money.com/buy-the-dip-investing-strategy-comeback/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![‘Buy the Dip’: Why the Investing Strategy Is Making a Comeback](https://img.money.com/2023/04/News-Buy-Dip.jpg?quality=85&w=1012&h=569&crop=1) Falling [stock](https://money.com/how-to-buy-stocks/) prices hardly ever seem like good news. But for investors who “buy the dip,” stock market plunges present an opportunity to load up with more assets on the cheap. Though buying the dip was [all the rage in 2021](https://money.com/buy-the-dip-stock-crypto-strategy/), the strategy [fell out of favor](https://money.com/buy-the-dip-investing-strategy-dead/) last year, as the stock market struggled and investors embraced more conservative practices like buying [bonds](https://money.com/buying-bonds-great-investing-move/) and [CDs](https://money.com/what-is-a-certificate-of-deposit/). However, data suggests that buying the dip could be a favorable play once again. ## Make sure your hard-earned money is protected with a Gold IRA ### Gold IRAs help you protect your investments by providing the asset diversification and stability you need. Click on your state to get started. [Invest in Gold](https://money.com/pr/ued87e7966ca?ap_referrer=%2Fbuy-the-dip-investing-strategy-comeback%2F) ## What the data says New data from investment service group Bespoke shows that buying the dip is primed for a comeback. Bespoke’s Tuesday note to clients indicates that investors who have been buying the dip are seeing positive returns once again. The report shows that since the beginning of 2023, SPY — the trading symbol for the popular [S&P 500](https://money.com/what-is-the-sp-500-index/) index [ETF](https://money.com/what-is-an-etf/) — has been averaging a return of 0.30% on trading sessions following days with price declines. This rate of return is nearly as high as 2020, when buying the dip paid off especially well for investors. “In 2020, SPY averaged a gain of 0.32% on the day after down days; the best 'day after down day' performance of any year in SPY's history,” Bespoke analysts wrote. Meanwhile, after up days for SPY, it has been dropping by an average of just 0.04% in 2023. This is a smaller drop than in 2020, when up days for the index were followed by an average loss of about 0.1%. By contrast in 2022, which was a poor year overall for stocks, the S&P saw declines on sessions following both up *and* down days. As the pattern of stock price gains after down days is reemerging, Bespoke researchers say that they've "seen the 'buy the dip' mentality return in a big way.” ## Take control of your financial future by investing in Gold ### Achieve greater financial security by providing effective solutions that can help protect your wealth. Click below to start investing today! [Invest in Gold](https://money.com/pr/ob5a017f5a3d?ap_referrer=%2Fbuy-the-dip-investing-strategy-comeback%2F) ## What “buy the dip” means Buying the dip is exactly what it sounds like: When an [asset](https://money.com/what-is-an-asset/) is declining in price, an investor buys it in anticipation of prices reversing course and rising. The strategy is best taken up by those who plan to hold their investments for the long term and have reason to believe that prices will bounce back. It can be thought of as “buying at a discount.” If the investor’s prediction is correct and the stock's price does indeed rise again, scooping up shares at a lower price can pay off very nicely in the long run. The strategy was especially popular in 2020 and 2021, when early pandemic market dips made stocks more affordable for [retail investors](https://www.finra.org/media-center/newsreleases/2021/new-research-global-pandemic-brings-surge-new-and-experienced-retail). By the second half of 2021, the “buy the dip” investing style would see its peak for both [retail and institutional investors](https://som.yale.edu/centers/international-center-for-finance/data/stock-market-confidence-indices/united-states). Last year, however, the trend fell out of favor as the "dips" became extended drops and failed to reverse. ## Bottom line Bespoke's research provides an interesting set of data for investors to consider when investing. First of all, buying the dip is proving very successful in 2023 — the gains are almost as good as 2020. Moreover, the research indicates that buying the dip is historically a better way to invest than buying on momentum, given that the S&P 500 sees more of its gains following down days than up days. Most important of all, investors should remember to [avoid selling when stocks are down](https://money.com/stock-market-volatility-investing-mistakes/), if at all possible. The goal, of course, is to buy low and sell high. Yet it's impossible to time the market consistently and always know the optimal time to buy or sell. So the smarter and safer move for investors is often to [do nothing](https://money.com/make-money-stock-market-do-nothing/) — simply [keep your money in the market](https://money.com/keep-money-in-stock-market-why-important/), ride out the ups and downs in volatile times, and stick to your long-term plan. ![](https://s3.consumersadvocate.org/prd/image/image/19305/medium_414558a1-29d4-465e-b5d1-921febc39ed2.png) American Hartford Gold can help you take control of your financial future [Invest in Gold](https://money.com/pr/u1f7b2bc903e?ap_referrer=%2Fbuy-the-dip-investing-strategy-comeback%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/buy-the-dip-investing-strategy-comeback/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Stocks", "item": "https://money.com/stocks/" }, { "@type": "ListItem", "position": 4, "name": "‘Buy the Dip’: Why the Investing Strategy Is Making a Comeback" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/buy-the-dip-investing-strategy-comeback/#webpage", "url": "https://money.com/buy-the-dip-investing-strategy-comeback/", "name": "‘Buy the Dip’: Why the Investing Strategy Is Making a Comeback", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-04-27T14:36:45.000Z", "mainEntity": { "@id": "https://money.com/buy-the-dip-investing-strategy-comeback/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/buy-the-dip-investing-strategy-comeback/#breadcrumb" }, "dateModified": "2023-11-14T19:36:44.000Z" }, { "@type": "NewsArticle", "headline": "‘Buy the Dip’: Why the Investing Strategy Is Making a Comeback", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/04/News-Buy-Dip.jpg?quality=85", "width": 2880, "height": 1920 } ], "author": [ { "@type": "Person", "name": "Brenden Rearick", "url": "https://money.com/author/brenden-rearick/", "@id": "https://money.com/author/brenden-rearick/#author", "description": "Brenden Rearick is a former news reporter at Money with nearly four years of experience covering investing and other personal finance topics.\r\n\r\n", "email": "brenden.rearick@money.com", "alumniOf": "University of Pittsburgh, BA" } ], "publisher": "https://money.com/#organization", "datePublished": "2023-04-27T14:36:45.000Z", "description": "Is \"buying the dip\" a smart investing strategy? 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