Through the latest inventory market correction, I made a decision to purchase the dip. However this time, I didn’t simply purchase my traditional dip-buying quantity of $25,000 to $100,000. I went a lot greater. All advised, I spent over $1 million shopping for the S&P 500 and varied tech shares like Meta, Microsoft, and Amazon.
Spending over $1 million shopping for shares was essentially the most I had ever invested in a 50-day interval. The final time I got here near this stage of inventory market funding was in late 2017 after I invested about $600,000 in shares. Again then, I had simply bought my largest rental property in San Francisco and walked away with about $1,780,000 after taxes and costs.
This time, the inventory market had already began dipping after I skilled one other liquidity occasion, forcing a troublesome resolution on easy methods to reinvest the proceeds. The method was harrowing and demanding, particularly because the unique funding had been secure for therefore a few years.
Nonetheless, to outperform the plenty, it’s essential to take dangers. I wish to share the psychological journey of investing a big sum throughout unsure occasions—and how one can overcome your individual worry of shopping for the dip. Let’s get began.
Why Shopping for The Dip Is So Arduous
I’m truly not afraid of shopping for the dip. I have been doing so since 1997, after I noticed my puny inventory portfolio decline throughout the Asian Monetary Disaster.
What I worry, although, is shopping for the dip with much more cash than I am used to investing. If I’ve much more cash to speculate, it normally means I am already dropping some huge cash in my current inventory portfolio.
Though shares have traditionally supplied a mean annual return of round 10%, there are many occasions after they right by 20% or extra. Simply in March 2020, the S&P 500 corrected by 32%.
The worst inventory market correction in our lifetime was the 2008-2009 International Monetary Disaster, the place the S&P 500 corrected by about 50%. That occasion was so extreme it made me query whether or not I wished to remain in finance for the remainder of my life.
Given the volatility of shares, I’ve all the time tried to dollar-cost common extra aggressively throughout downturns. DCAing is key to dip shopping for. However once you’re already dropping a boatload of cash out of your current inventory portfolio, it may be terrifying to speculate much more of your protected money.
How To Overcome Your Worry Of Shopping for The Inventory Market Dip
If you happen to’re afraid of shopping for the dip, you are not alone. As I used to be sharing my dip-buying in my weekly free e-newsletter, I acquired common emails from readers explaining that I used to be silly or was ignoring the catastrophic repercussions of the commerce wars and many others. It was fascinating as a result of I’ve been writing concerning the dangers, together with the chance of stagflation on the horizon.
Listed here are the steps I took to beat that worry of shopping for—they may enable you to too. For context, I’ve been shopping for market dips with actual revenue ever since I landed my first job on Wall Road in 1999. Over time, there have been loads of corrections, and every one has felt horrible within the second.
It’s additionally necessary to acknowledge the distinction between shopping for the dip with common revenue or money stream and shopping for the dip after a significant liquidity occasion—like when a non-public actual property funding pays out. Reinvesting a big lump sum could be a lot tougher, particularly when the unique capital carried out effectively. The psychological strain to not “mess it up” could be intense.
However if you wish to construct outsized wealth, it’s essential to take extra calculated dangers. In any other case, you will find yourself like all people else, or worse. Let’s get began.
1) Give A few of Your Cash To Your Household First
All the time unfold luck when it comes your means. The extra individuals round you who profit, the higher. And in the event you ever end up down in your luck, perhaps these you’ve got helped will return the favor.
After a liquidity occasion, I transferred $50,000 to my spouse’s checking account and $25,000 every to my two youngsters’ custodial funding accounts, Roth IRAs, and 529 plans. Whereas it’s all a part of the identical household pot, I took consolation in understanding that if I made poor funding choices with the remaining funds, no less than I unfold $100,000 of the winnings to the three individuals I care about essentially the most.
My spouse, who’s extra risk-averse, invested in a mixture of shares and Treasury bonds. For my youngsters, I saved issues easy with vanilla S&P 500 ETFs of their UTMs and target-date funds of their 529s.
By redistributing cash to my family members first, I felt a deeper sense of safety and objective. It was much like the thought of paying your self first—saving and investing a portion of your revenue earlier than spending—however considered via the lens of long-term household planning.
Though my very own portfolios have been getting hammered by the correction, the least I might do was shield my kids’s. So I purchased the dip aggressively. That is the Supplier’s Clock in motion. Their portfolios have been sufficiently small that each correction may very well be countered with money infusions. Psychologically, this gave me the braveness to maintain investing.
2) Do One thing Accountable With the Cash Earlier than Investing
Along with redistributing among the cash to your loved ones, think about using a few of it for accountable monetary strikes earlier than diving into the market.
- Pay down debt: Begin with high-interest debt, then work your means down. See the FS-DAIR methodology to assist decide how a lot cash to separate between paying down debt and investing.
- Repair what’s damaged: Use the cash for important repairs—whether or not it’s a leaking roof, a failing water heater, or a mandatory automotive restore.
- Put money into your well being: Think about spending on issues that enhance your well-being, like train courses, ergonomic work setups, or higher diet.
For me, I allotted a few of my cash towards fixing my scorching tub. Then I spent $1,025 changing my automotive’s heater manifold, which cracked. Realizing I had put my cash to good use in different methods made it simpler to abdomen potential funding losses.
3) Write Out Your Funding Recreation Plan and Comply with It
When investing a major sum of money, it is essential to determine an funding sport plan. This plan acts as a guiding framework that will help you keep disciplined when the inventory market is falling aside.
Your plan ought to define your goal asset allocation, funding time horizon, and a set vary for every dip buy. Moreover, assess whether or not the market is experiencing a correction (-5% to -19.9%) or if it is more likely to enter a bear market with a decline of 20% or extra.
If you happen to imagine it is only a correction, you could be extra aggressive together with your dip shopping for. Nonetheless, in the event you anticipate a bear market, be extra affected person and unfold out your purchases to keep away from depleting your money reserves too rapidly. Having money is important for sustaining sufficient confidence to spend money on a downturn.
After securing my family members and dealing with mandatory bills, I outlined my funding plan. Not solely did I write it down, however I additionally printed it in my put up, A Easy Three-Step Course of To Investing A Lot Of Cash Properly. Then I printed, My Bear Market Funding Recreation Plan. The six hours I spent writing and modifying the articles compelled me to suppose deeply for my scenario and for readers who face the same scenario.
As soon as I had my technique in place, I methodically deployed capital, shopping for the dip daily the market declined. After I hit my preliminary allocation restrict for the day or week, I reassessed. My aim was to speculate 80% or extra of my money into danger belongings throughout the correction.
You need not comply with your funding sport plan completely, however having one will enable you to keep on observe. Probably the most widespread errors I see is when individuals lose self-discipline and purchase an excessive amount of inventory too early. You need to all the time have sufficient money to make the most of deeper corrections.
Moved to My Subsequent Funding: Actual Property
After ending my seven-figure funding in varied shares, I shifted my focus to residential business actual property.
I noticed the most important valuation discrepancy between the S&P 500 and business actual property, so I began dollar-cost averaging into Fundrise, which is feasible because of its$10 minimal. I imagine the present oversupply in residential business actual property will probably be absorbed by the top of 2025, resulting in upward strain on rents and property costs in 2026 and past.
Regardless of my desire for worth investing, I didn’t allocate as a lot capital to actual property as I did to shares. Actual property strikes at a a lot slower tempo than shares—anyplace from 3x to 8x slower in my estimate. Whereas inventory costs can right and recuperate inside weeks, actual property cycles usually take years.
This distinction in timing influenced my funding technique: I felt a larger sense of urgency with shares, which might rebound rapidly. Whereas I might afford to be extra affected person with actual property. In different phrases, the inventory market correction created extra investing FOMO and I did not wish to miss out.
4) Undertake the “Go Broke” Mentality To Conquer Your Worry
One of many greatest psychological hurdles in shopping for the dip is the worry that the market will preserve dipping. Many individuals anticipate affirmation that the worst is over—however by then, a lot of the rebound might have already occurred.
That’s why I embrace a distinct mindset: I kiss my cash goodbye the second I make investments it.
As an alternative of viewing the cash as mine, I see it as my contribution to the monetary way forward for my spouse and youngsters. The cash is now within the fingers of the inventory market or actual property market gods to do their factor. Will they punish me or reward me? I hope the latter over time.
After all, losses nonetheless sting. However by shifting my perspective, I scale back the emotional weight of every downturn. The much less private the cash feels, the better it’s to speculate.
And let’s be actual: it is a lot simpler to speculate $10,000 than $1 million. With bigger sums, one mistaken transfer can set you again years. Having the proper inventory publicity is essential. That is why each dip you purchase can truly enable you to really feel extra comfortable — you’ve got much less cash left over to place to work, decreasing the strain of future choices.
In any case, once you’re broke, there’s solely upside!
Keep in mind, scared cash does not generate income. This saying comes from my time enjoying poker. At any time when I really feel hesitant about going all-in, I calculate the chances, and in the event that they’re in my favor, I press.
5) Lengthen Your Funding Time Horizon To At Least 10 Years
I do not know anyone within the historical past of dip shopping for who has held on and misplaced cash. Nicely, besides for individuals who received margin referred to as. If you happen to can prolong your funding time horizon to no less than 10 years, you possible have a 95%+ likelihood of earning profits. Stretch it to twenty years, and your odds rise to 99.9% based mostly on historic returns.
In case you have younger kids, they are often the best motivation to purchase the dip. Think about your youngsters of their 20s or 30s, speaking shares, actual property, and different investments. If you happen to might journey to that future second, you’d most likely wager all the pieces you’ve got immediately to safe their monetary future.
Earlier than I had youngsters, I used to be much less aggressive shopping for the dips. I already had sufficient cash to be happy, which is why I left work within the first place.
However now, it is a lot simpler as a result of my youngsters’ funding accounts are smaller, and each dip is a shopping for alternative for them. Apart from, if I wish to assist them grow to be financially impartial by 25, they/we should be extra aggressive. The robots are coming!
6) Anticipate to Lose — It’s the Worth of Investing
Lastly, the worst factor you are able to do when shopping for the dip is assume you’ll be able to’t lose. Anybody who has ever invested within the inventory market or taken outsized dangers has misplaced cash earlier than—and you’ll too. Losses are inevitable.
Even in the event you’re holding pocket Aces pre-flop in a heads-up sport of Texas No-Restrict Maintain’em, you will nonetheless lose about 15% of the time. The identical goes for investing. That’s why it’s essential to calculate your potential draw back earlier than deploying capital throughout a dip.
For instance, in the event you make investments $100,000 after a ten% correction, perceive that corrections can typically flip into bear markets. An extra 25% drop out of your entry level would imply a complete 35% drawdown, translating right into a $25,000 paper loss.
If you happen to put together for this chance forward of time, the ache might sting much less if it truly occurs. Plus, you will be in a greater place emotionally and financially to speculate extra at even decrease costs.
Timing The Market Is Robust, Keep Humble
Nonetheless suppose you’ll be able to time the market? Simply take a look at Mike Wilson, Chief Funding Officer of Morgan Stanley. He was bearish all through 2023 and 2024, and the S&P 500 posted back-to-back positive factors of 20%+.
On April 7, 2025, after the S&P 500 had already corrected to five,000, he predicted one other 7%–8% drop to 4,700. Doom was on the horizon! Then, barely a month afterward Might 12, he appeared on CNBC with bullish conviction, claiming his 6,500 goal can be fulfilled. Unbelievable! Being a Wall Road strategist or economist have to be the very best job—you could be mistaken repeatedly and nonetheless receives a commission handsomely.
However this simply goes to indicate how troublesome it’s to time the markets appropriately. Simply once you suppose you’ll be able to’t lose, you would possibly lose a boatload. And simply when it feels just like the sky is darkest, the smooth glow of the solar begins to rise. Keep humble.
I totally anticipate to expertise losses from my new investments once more. Working example: I purchased ~$50,000 of Nike (NKE) inventory between $68–$73 per share earlier in 2025, considering it was a compelling turnaround story. The inventory was at a five-year low, a brand new CEO was in place, and valuations appeared affordable. Mistaken! Nike cratered to $53 simply two months later—a ~30% drop—partly as a result of imposition of recent tariffs. It seems to be like it is going to be lifeless cash for an extended whereas. At the least my Air Jordans look candy.
Don’t Run Out of Money – Cardinal Rule Of Dip-Shopping for
One of many hardest components of shopping for the dip is operating out of money. It is a type of psychological warfare as a result of you’ll want to settle for that your current investments are dropping worth whereas additionally watching your liquidity shrink with every inventory buy.
Whenever you lastly run out of money, it is like operating out of ammunition whereas being surrounded by zombies. You are weak, uncovered, and unable to defend your self financially. Residing paycheck-to-paycheck will snuff out your braveness to speculate.
That is why it is important to remain disciplined in how a lot you purchase with every dip. Your feelings might run rampant.
You Will Really feel Confused, Present Your self Grace
All the course of of shopping for the dip for six weeks was demanding, particularly since a part of the time I used to be up in Lake Tahoe making an attempt to get some ski runs in with my household on trip. However I caught to my funding sport plan and cadence, trusting that my method would repay in the long term.
If you happen to’re the accomplice who does not handle the family funds, take a second to acknowledge the trouble of the accomplice who does. Managing your loved ones’s funds can usually really feel like a full-time job, particularly throughout market downturns when the strain to make the fitting choices intensifies. A little bit appreciation can go a great distance in supporting the individual carrying that weight.
There have been loads of moments when my temper soured because the inventory market saved dropping with every new aggressive authorities coverage initiative. Nonetheless, I did my greatest to defend my household from the stress I used to be feeling.
When shopping for the dip and the market retains dipping, it is essential to remind your self that you simply’re making an attempt your greatest. No person can time the market completely, however taking motion and making considerate choices already places you forward of those that sit on the sidelines.
One other Market Correction Is Inevitable
Whether or not it is a 10% pullback or a 50% crash, no person can predict it with certainty. Nonetheless, given the robust historic observe report of shopping for the dip, it is a good suggestion to all the time have some idle money able to deploy the following time it occurs.
So the following time a market decline shakes your confidence, keep in mind:
- Safe your family members first.
- Make accountable monetary strikes earlier than investing.
- Write out your funding plan and persist with it.
- Embrace the “go broke” mentality the place each greenback you make investments is now not yours.
- Lengthen your funding horizon.
- Settle for that you’ll lose cash, no less than, quickly as you will not have the ability to time the underside.
And most significantly—don’t run out of money. It’s your liquid braveness!
As a result of when the dip comes, you wish to be able to take benefit, whereas non-personal finance run for the hills. The one strategy to construct outsized wealth is to take extra calculated dangers. Better of luck together with your funding choices!
Reader Questions and Solutions
Do you commonly purchase the dip? In that case, how do you determine how a lot to speculate throughout a downturn? How do you deal with the worry of placing considerably extra money to work whereas watching your current portfolio decline?
Reduce Funding Volatility With Actual Property
Inventory market volatility is a value you pay as an equities investor. If you wish to dampen the volatility, diversify into actual property. Actual property is a extra secure asset class that generates revenue and supplies utility.
Take a look at Fundrise, my favourite non-public actual property funding platform open to all traders. With an funding minimal of solely $10, it is easy to diversify into actual property and earn extra passive revenue.
The true property platform invests primarily in residential and industrial properties within the Sunbelt, the place valuations are cheaper and yields are larger. The spreading out of America is a long-term demographic pattern. For most individuals, investing in a diversified fund is the way in which to go.
I’ve invested ~$1,000,000 in non-public actual property thus far, with over $300,000 in Fundrise, a long-time sponsor. My aim is to diversify my costly SF actual property holdings and earn extra 100% passive revenue. I plan to proceed dollar-cost investing into non-public actual property for the following decade.
About Monetary Samurai
Based in 2009, Monetary Samurai is the main independently-owned private finance web site immediately with about 1 million pageviews a month. Each article is grounded in firsthand expertise and real-world data.
I labored within the equities division of Goldman Sachs and Credit score Suisse for 13 years earlier than retiring from banking in 2012 at age 34. I am additionally the writer of the brand new guide, Millionaire Milestones: Easy Steps To Seven Figures.
Be part of over 60,000 readers and join the free weekly e-newsletter right here. I share real-time funding and financial insights in addition to general private finance matters.
