Buy the Dip? Deciding When to Buy Stocks

It’s tough to determine whether the market has hit its bottom, but you can still buy the bear.

When the stock market performs well, investors tend to stick to their investment strategy. But when markets turn chaotic, some may panic and start to sell off their investments. Changes in financial markets are effective at playing with our emotions, but instead of exiting the market, there are ways to take advantage of a market downturn.

Buying the dip is a strategy used to buy stocks when their prices are down, betting that the long-term upward trend will eventually win out. But this strategy is not exclusive to stocks. Investors can buy the dip on any asset class, like commodities, exchange-traded funds and cryptocurrencies.