In the course of the latest 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 greater. All advised, I spent over $1 million shopping for the S&P 500 and numerous 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 once I invested about $600,000 in shares. Again then, I had simply sold 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 once I skilled one other liquidity occasion, forcing a tricky resolution on tips on how to reinvest the proceeds. The method was harrowing and irritating, particularly because the unique funding had been steady for therefore a few years.
Nonetheless, to outperform the lots, 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 personal worry 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 through 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 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 appropriate 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 Global Financial Crisis, the place the S&P 500 corrected by about 50%. That occasion was so extreme it made me query whether or not I needed to remain in finance for the remainder of my life.
Given the volatility of shares, I’ve all the time tried to dollar-cost average more aggressively throughout downturns. DCAing is prime to dip shopping for. However while you’re already dropping a boatload of cash out of your current inventory portfolio, it may be terrifying to take a position much more of your protected money.
How To Overcome Your Concern Of Shopping for The Inventory Market Dip
If you happen to’re afraid of shopping for the dip, you are not alone. Listed here 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 Street in 1999. Through the years, there have been loads of corrections, and each has felt horrible within the second.
It’s additionally necessary to acknowledge the distinction between shopping for the dip with common earnings or money circulate and shopping for the dip after a serious liquidity occasion—like when a private real estate investment pays out. Reinvesting a big lump sum will be a lot tougher, 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, it’s essential to take extra calculated dangers. In any other case, you may find yourself like all people else, or worse. Let’s get began.
1) Give A few of Your Cash To Your Household First
Unfold luck when it comes your means. The extra folks round you who profit, the higher. And for those who ever end up down in your luck, possibly these you have 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, at the least 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 children, 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 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 in each their custodial accounts. It is a man’s Provider’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
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 means 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 automotive restore.
- Put money into your well being: Think about 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 hot tub. Then I spent $1,025 changing my automotive’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 Recreation 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 target 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.
If you happen to imagine it is only a correction, you will be extra aggressive along with your dip shopping for. Nonetheless, 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 shortly. Having money is important for sustaining sufficient confidence to put money into 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 revealed it in my publish, A Simple Three-Step Process To Investing A Lot Of Money Wisely. The three hours I spent writing and enhancing the article pressured me to suppose 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 day-after-day the market declined. After I hit my preliminary allocation restrict for the day or week, I reassessed.
You needn’t observe your funding sport plan completely, however having one will provide help to keep on observe. One of the frequent errors I see is when folks lose self-discipline and purchase an excessive amount of inventory too early. You should all the time have sufficient money to reap the benefits of deeper corrections.
Moved to My Subsequent Funding: Actual Property
After ending my seven-figure funding in numerous shares, I shifted my focus to residential industrial actual property.
I noticed the most important valuation discrepancy between the S&P 500 and industrial 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 industrial 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—wherever from 3x to 8x slower in my estimate. Whereas inventory costs can appropriate and recuperate inside weeks, actual property cycles usually take years.
This distinction in timing influenced my funding technique: I felt a higher 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 wish 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 forward 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 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 purpose 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 unsuitable transfer can set you again years. Having the right stock exposure is vital. That is why each dip you purchase can really provide help to really feel extra comfortable — you might 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!
Keep in mind, scared cash does not generate income. 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. Properly, besides for individuals who acquired margin called. If you happen to can prolong your funding time horizon to at the least 10 years, you probably have a 95%+ probability of making a living. Stretch it to twenty years, and your odds rise to 99.9% based mostly on historic returns.
When you’ve got 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. If you happen to might journey to that future second, you’d most likely guess the whole lot you might have immediately 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 happy, 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. Moreover, if I wish to assist them become financially independent by 25, they/we have to 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 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, for those who 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.
If you happen to 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 Powerful, 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 aspects of 20%+.
On April 7, 2025, after the S&P 500 had already corrected to five,000, he predicted another 7%–8% drop to 4,700. Doom was on the horizon! Then, barely a month in a while Might 12, he appeared on CNBC with bullish conviction, claiming his 6,500 goal can be fulfilled. Unimaginable. Being a Wall Road strategist or economist have to be the very best job—you will be unsuitable repeatedly and nonetheless receives a commission handsomely.
However this simply goes to indicate how tough it’s to time the markets appropriately. Simply while 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 delicate 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, 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 cheap. 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 elements of shopping for the dip is operating out of money. It is a type of psychological warfare as a result of it’s worthwhile to settle for that your current investments are dropping worth whereas additionally watching your liquidity shrink with every inventory buy.
If 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 Harassed, Present Your self Grace
All the course of of shopping for the dip for six weeks was irritating, particularly since a part of the time I used to be up in Lake Tahoe attempting to get some ski runs in with my family on vacation. However I caught to my funding sport plan and cadence, trusting that my strategy would repay in the long term.
If you happen to’re the companion who does not handle the family funds, take a second to acknowledge the trouble of the companion who does. Managing your family’s finances can usually really feel like a full-time job, particularly throughout market downturns when the strain to make the proper selections 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 protect 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 attempting 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 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, bear 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 not yours.
- Prolong your funding horizon.
- Settle for that you’ll lose cash, at the least, quickly as you will not be capable to time the underside.
And most significantly—don’t run out of money. It’s your liquid courage!
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 along with your funding selections!
Reader Questions and Recommendations
Do you often purchase the dip? If that’s the 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 more cash to work whereas watching your current portfolio decline?
Decrease 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 gives 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 simple to diversify into actual property and earn extra passive earnings.
The true 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 way in which to go.
I’ve invested ~$1,000,000 in non-public actual property up to now, with over $300,000 in Fundrise, a long-time sponsor. My purpose 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 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 ebook, Millionaire Milestones: Simple Steps To Seven Figures.
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