Through the current inventory market correction, I made a decision to purchase the dip. However this time, I didn’t simply purchase my regular dip-buying quantity of $25,000 to $100,000. I went a lot larger. All informed, 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 probably 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 once 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 charges.
This time, the inventory market had already began dipping once I skilled one other liquidity occasion, forcing a troublesome determination on methods to reinvest the proceeds. The method was harrowing and demanding, particularly for the reason that unique funding had been steady for therefore a few years.
Nonetheless, to outperform the plenty, you will need to take dangers. I need to share the psychological journey of investing a big sum throughout unsure instances—and how one can overcome your individual concern of shopping for the dip. Let me present you ways.
Why Shopping for The Dip Is So Exhausting
I’m really not afraid of shopping for the dip. I have been doing so since 1997, once I noticed my puny inventory portfolio decline throughout the Asian Monetary Disaster.
What I concern, 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 often means I am already shedding some huge cash in my present inventory portfolio.
Though shares have traditionally offered a median annual return of round 10%, there are many instances once 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 World 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 at all times tried to dollar-cost common extra aggressively throughout downturns. DCAing is key to dip shopping for. However while you’re already shedding a boatload of cash out of your present inventory portfolio, it may be terrifying to speculate much more of your protected money.
How To Overcome Your Concern Of Shopping for The Inventory Market Dip
In the event you’re afraid of shopping for the dip, you are not alone. Listed below are the steps I took to beat that concern—they may show you how to too. For context, I’ve been shopping for market dips with work earnings ever since I landed my first job on Wall Avenue in 1999. Over time, there have been loads of corrections, and each has felt horrible within the second.
It’s additionally essential to acknowledge the distinction between shopping for the dip with common earnings or money movement 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 will be a lot more durable, particularly when the unique capital carried out nicely. The psychological strain to not “mess it up” will be intense.
However if you wish to construct outsized wealth, you will need to take extra calculated dangers. In any other case, you may find yourself like everyone else, or worse. Let’s get began.
1) Give A few of Your Cash To Your Household First
Unfold luck when it comes your approach. The extra individuals round you who profit, the higher. And should you ever end up down in your luck, possibly 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 children’ 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 selections with the remaining funds, a minimum of I unfold $100,000 of the winnings to the three individuals I care about probably the most.
My spouse, who’s extra risk-averse, invested in a mixture of shares and Treasury bonds. For my children, I stored issues easy with vanilla S&P 500 ETFs and target-date funds.
By redistributing cash to my family members first, I felt a deeper sense of safety and goal. It was much like the thought of paying your self first—saving and investing a portion of your earnings earlier than spending—however considered via the lens of long-term household planning.
Though my very own portfolios had been getting hammered by the correction, the least I might do was defend my kids’s. So I purchased the dip in each their custodial accounts. This can be a man’s Supplier’s Clock in motion. Their portfolios had been sufficiently small that each correction might 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
As well as redistributing your 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 approach down.
- Repair what’s damaged: Use the cash for important repairs—whether or not it’s a leaking roof, a failing water heater, or a crucial automobile restore.
- Spend money on your well being: Take into account spending on issues that enhance your well-being, like train lessons, 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 automobile’s heater manifold, which cracked. Understanding I had put my cash to good use in different methods made it simpler to abdomen potential funding losses.
3) Write Out Your Funding Sport Plan and Comply with It
When investing a big amount of cash, it is essential to determine an funding sport plan. This plan acts as a guiding framework that can assist 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.
In the event you consider it is only a correction, you will be extra aggressive along with your dip shopping for. Nonetheless, should you anticipate a bear market, be extra affected person and unfold out your purchases to keep away from depleting your money reserves too shortly. Having money is important for sustaining sufficient confidence to put money into a downturn.
After securing my family members and dealing with crucial bills, I outlined my funding plan. Not solely did I write it down, however I additionally printed it in my submit, A Easy Three-Step Course of To Investing A Lot Of Cash Correctly. The three hours I spent writing and enhancing the article pressured me to assume deeply for my state of affairs and for readers who face the same state of affairs.
As soon as I had my technique in place, I methodically deployed capital, shopping for the dip daily the market declined. Once I hit my preliminary allocation restrict for the day or week, I reassessed.
You need not comply with your funding sport plan completely, however having one will show you how to keep on monitor. One of the widespread errors I see is when individuals lose self-discipline and purchase an excessive amount of inventory too early. You have to at all times have sufficient money to reap the benefits 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 on account of its$10 minimal. I consider the present oversupply in residential business actual property will likely 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—wherever from 3x to 8x slower in my estimate. Whereas inventory costs can right and get well 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 shortly. 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 need to miss out.
4) Undertake the “Go Broke” Mentality To Conquer Your Concern
One of many greatest psychological hurdles in shopping for the dip is the concern that the market will hold dipping. Many individuals watch for 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 a substitute of viewing the cash as mine, I see it as my contribution to the monetary way forward for my spouse and children. The cash is now within the palms of the inventory market or actual property market gods to do their factor. Will they punish me or reward me? I hope the latter as my objective is to deal with my household.
After all, losses nonetheless sting. However by shifting my perspective, I cut 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 fallacious transfer can set you again years. Having the proper inventory publicity is essential. That is why each dip you purchase can really show you how to really feel extra comfy — you may have much less cash left over to place to work, lowering the strain of future selections.
In any case, while you’re broke, there’s solely upside!
Bear in mind, scared cash does not generate profits. This saying comes from my time taking part in poker. Each time I really feel hesitant about going all-in, I calculate the percentages, and in the event that they’re in my favor, I press.
5) Prolong 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. Properly, besides for individuals who acquired margin referred to as. In the event you can lengthen your funding time horizon to a minimum of 10 years, you seemingly have a 95%+ probability of making a living. Stretch it to twenty years, and your odds rise to 99.9% primarily based on historic returns.
If in case you have younger kids, they are often the simplest motivation to purchase the dip. Think about your children of their 20s or 30s, speaking shares, actual property, and different investments. In the event you might journey to that future second, you’d most likely guess all the pieces you may have as we speak to safe their monetary future.
Earlier than I had children, I used to be much less aggressive shopping for the dips. I already had sufficient cash to be glad, which is why I left work within the first place.
However now, it is a lot simpler as a result of my children’ funding accounts are smaller, and each dip is a shopping for alternative for them. In addition to, if I need to assist them change into financially unbiased by 25, they/we must be extra aggressive. The robots are coming!
6) Count on 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 should you’re holding pocket Aces pre-flop in a heads-up sport of Texas No-Restrict Maintain’em, you may 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, should you make investments $100,000 after a ten% correction, perceive that corrections can typically flip into bear markets. An additional 25% drop out of your entry level would imply a complete 35% drawdown—translating right into a $25,000 paper loss.
In the event you put together for this chance forward of time, the ache might sting much less if it really occurs. Plus, you may be in a greater place emotionally and financially to speculate extra at even decrease costs.
Timing The Market Is Powerful, Keep Humble
Nonetheless assume you’ll be able to time the market? Simply have 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 in a while Could 12, he appeared on CNBC with bullish conviction, claiming his 6,500 goal can be fulfilled. Unimaginable! Being a Wall Avenue strategist or economist have to be the very best job—you will be fallacious repeatedly and nonetheless receives a commission handsomely.
However this simply goes to point out how tough it’s to time the markets accurately. Simply while you assume 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 mushy glow of the solar begins to rise. Keep humble.
I totally anticipate to expertise losses from my new investments once more. Living proof: I purchased ~$50,000 of Nike (NKE) inventory between $68–$73 per share earlier in 2025, pondering 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. Unsuitable! Nike cratered to $53 simply two months later—a ~30% drop—partly as a result of imposition of recent tariffs.
Don’t Run Out of Money – Cardinal Rule Of Dip-Shopping for
One of many hardest elements of shopping for the dip is working out of money. It is a type of psychological warfare as a result of you want to settle for that your present investments are shedding worth whereas additionally watching your liquidity shrink with every inventory buy.
If you lastly run out of money, it is like working out of ammunition whereas being surrounded by zombies. You are weak, uncovered, and unable to defend your self financially. Dwelling 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
Your entire 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.
In the event you’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 best selections intensifies. Somewhat appreciation can go a great distance in supporting the particular person carrying that weight.
There have been loads of moments when my temper soured because the inventory market stored 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 just’re making an attempt your greatest. No person can time the market completely, however taking motion and making considerate selections 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 one can predict it with certainty. Nonetheless, given the robust historic monitor report of shopping for the dip, it is a good suggestion to at all times have some idle money able to deploy the subsequent time it occurs.
So the subsequent 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 follow it.
- Embrace the “go broke” mentality the place each greenback you make investments is now not yours.
- Prolong your funding horizon.
- Settle for that you’ll lose cash, a minimum of, briefly as you will not be capable of 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 need to be able to take benefit, whereas non-personal finance run for the hills. The one method to construct outsized wealth is to take extra calculated dangers. Better of luck along with your funding selections!
Reader Questions and Solutions
Do you frequently purchase the dip? If that’s the case, how do you resolve how a lot to speculate throughout a downturn? How do you deal with the concern of placing considerably extra money to work whereas watching your present 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 steady asset class that generates earnings 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 earnings.
The actual property platform invests primarily in residential and industrial properties within the Sunbelt, the place valuations are cheaper and yields are increased. 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 objective is to diversify my costly SF actual property holdings and earn extra 100% passive earnings. I plan to proceed dollar-cost investing into non-public actual property for the subsequent decade.
About Monetary Samurai
Based in 2009, Monetary Samurai is the main independently-owned private finance website as we speak 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 creator of the brand new e-book, Millionaire Milestones: Easy Steps To Seven Figures.
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