Through the current 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 larger. All instructed, 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 degree 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 charges.
This time, the inventory market had already began dipping after I skilled one other liquidity occasion, forcing a troublesome resolution on the right way to reinvest the proceeds. The method was harrowing and aggravating, particularly because the authentic funding had been secure for thus a few years.
Nevertheless, 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 worry of shopping for the dip. Let me present you ways.
Why Shopping for The Dip Is So Arduous
I’m really not afraid of shopping for the dip. I have been doing so since 1997, after I noticed my puny inventory portfolio decline in the course of 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 take a position, it often means I am already shedding some huge cash in my current inventory portfolio.
Though shares have traditionally offered a mean 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 prime to dip shopping for. However once you’re already shedding a boatload of cash out of your current inventory portfolio, it may be terrifying to take a position much more of your secure money.
How To Overcome Your Concern Of Shopping for The Inventory Market Dip
Should you’re afraid of shopping for the dip, you are not alone. Listed below are the steps I took to beat that worry—they may provide help to too. For context, I’ve been shopping for market dips with work earnings 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 vital to acknowledge the distinction between shopping for the dip with common earnings or money move and shopping for the dip after a serious liquidity occasion—like when a personal actual property funding pays out. Reinvesting a big lump sum might be a lot more durable, particularly when the unique capital carried out effectively. The psychological strain to not “mess it up” might 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 method. The extra folks round you who profit, the higher. And for those who 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 figuring out that if I made poor funding choices with the remaining funds, a minimum of I unfold $100,000 of the winnings to the three folks I care about probably 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 and target-date funds.
By redistributing cash to my family members first, I felt a deeper sense of safety and function. It was just like the concept of paying your self first—saving and investing a portion of your earnings earlier than spending—however considered by means of the lens of long-term household planning.
Though my very own portfolios had been getting hammered by the correction, the least I may do was shield my kids’s. So I purchased the dip in each their custodial accounts. It is a man’s Supplier’s Clock in motion. Their portfolios had been sufficiently small that each correction could possibly 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 method 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 essential automobile restore.
- Put money into your well being: Take into account 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 sizzling tub. Then I spent $1,025 changing my automobile’s heater manifold, which cracked. Figuring out 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 Observe It
When investing a major sum of money, it is essential to ascertain an funding recreation 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 prone to enter a bear market with a decline of 20% or extra.
Should you imagine it is only a correction, you might be extra aggressive together with your dip shopping for. Nevertheless, for those who 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 significant for sustaining sufficient confidence to spend money on a downturn.
After securing my family members and dealing with essential bills, I outlined my funding plan. Not solely did I write it down, however I additionally printed it in my publish, A Easy Three-Step Course of To Investing A Lot Of Cash Correctly. The three hours I spent writing and modifying the article pressured me to assume 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 day-after-day the market declined. After I hit my preliminary allocation restrict for the day or week, I reassessed.
You need not comply with your funding recreation plan completely, however having one will provide help to keep on monitor. One of the vital frequent errors I see is when folks lose self-discipline and purchase an excessive amount of inventory too early. You could at all times have sufficient money to benefit from 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 imagine the present oversupply in residential business actual property will likely be absorbed by the tip of 2025, resulting in upward strain on rents and property costs in 2026 and past.
Regardless of my choice 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 get well inside weeks, actual property cycles typically take years.
This distinction in timing influenced my funding technique: I felt a higher sense of urgency with shares, which may rebound rapidly. Whereas I may 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 worry that the market will maintain dipping. Many individuals look ahead to affirmation that the worst is over—however by then, a lot of the rebound could have already occurred.
That’s why I embrace a unique 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 children. The cash is now within the arms 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 aim is to maintain my household.
In fact, 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 simpler it’s to take a position.
And let’s be actual: it is a lot simpler to take a position $10,000 than $1 million. With bigger sums, one incorrect transfer can set you again years. Having the proper inventory publicity is essential. That is why each dip you purchase can really provide help to really feel extra comfortable — you’ve gotten much less cash left over to place to work, lowering the strain of future choices.
In any case, once 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. 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) 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. Effectively, besides for individuals who acquired margin referred to as. Should you can prolong your funding time horizon to a minimum of 10 years, you seemingly have a 95%+ likelihood of being profitable. Stretch it to twenty years, and your odds rise to 99.9% primarily based on historic returns.
When 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. Should you may journey to that future second, you’d most likely wager all the pieces you’ve gotten at present 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 glad, 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 need to assist them develop into financially unbiased by 25, they/we should 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 for those who’re holding pocket Aces pre-flop in a heads-up recreation 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, for those who make investments $100,000 after a ten% correction, perceive that corrections can generally 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.
Should you put together for this chance forward of time, the ache could sting much less if it really occurs. Plus, you may be in a greater place emotionally and financially to take a position extra at even decrease costs.
Timing The Market Is Robust, Keep Humble
Nonetheless assume 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 in a while Could 12, he appeared on CNBC with bullish conviction, claiming his 6,500 goal could be fulfilled. Unimaginable. Being a Wall Road strategist or economist have to be the most effective job—you might be incorrect repeatedly and nonetheless receives a commission handsomely.
However this simply goes to point out how tough it’s to time the markets accurately. Simply once 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 smooth glow of the solar begins to rise. Keep humble.
I absolutely 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, 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. Improper! 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 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 shedding 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. Dwelling paycheck-to-paycheck will snuff out your braveness to take a position.
That is why it is important to remain disciplined in how a lot you purchase with every dip. Your feelings could run rampant.
You Will Really feel Confused, Present Your self Grace
Your complete course of of shopping for the dip for six weeks was aggravating, particularly since a part of the time I used to be up in Lake Tahoe attempting to get some ski runs in with my household on trip. However I caught to my funding recreation plan and cadence, trusting that my method would repay in the long term.
Should you’re the companion who does not handle the family funds, take a second to acknowledge the trouble of the companion who does. Managing your loved ones’s funds can typically 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 good distance in supporting the particular person 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. Nevertheless, 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 attempting your greatest. No one 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 one can predict it with certainty. Nevertheless, 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 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.
- 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 technique to construct outsized wealth is to take extra calculated dangers. Better of luck together with your funding choices!
Reader Questions and Recommendations
Do you frequently purchase the dip? In that case, how do you resolve how a lot to take a position throughout a downturn? How do you deal with the worry of placing considerably extra money to work whereas watching your current portfolio decline?
Decrease Funding Volatility With Actual Property
Inventory market volatility is a worth 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 earnings and offers utility.
Take a look at Fundrise, my favourite personal actual property funding platform open to all buyers. 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 development. For most individuals, investing in a diversified fund is the best way to go.
I’ve invested ~$1,000,000 in personal 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 earnings. I plan to proceed dollar-cost investing into personal actual property for the following decade.
About Monetary Samurai
Based in 2009, Monetary Samurai is the main independently-owned private finance web site at present with about 1 million pageviews a month. Each article is grounded in firsthand expertise and real-world information.
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 e book, Millionaire Milestones: Easy Steps To Seven Figures.
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