Is Buying the Dip Now a Bad Move or Value Investing?

employee
Tiger_comments
03-05

US stocks continue to decline, especially with star stocks like Nvidia and Tesla, which have fallen 13% and 32% respectively this year. Many investors have started to buy the dip, but analysts believe the market hasn't fully dropped yet and caution against rushing to catch the bottom.

Is 2018's Market CRASH Repeating?

In October and December of 2018, $S&P 500(.SPX)$ dropped by 15% cumulatively.

The current market situation closely resembles the 2018 trade war scenario: uncertainty over tariffs + high interest rates. The biggest difference lies in valuations. Current PE of $S&P 500(.SPX)$ is higher than in early 2018.

If the tariff war continues to escalate and the economy weakens, the current market pullback (6% off its high) may not be over. Additionally, current market valuations are much higher than in 2018, so if these scenarios materialize, the pullback could exceed 20%.

In February, US ADP employment numbers increased by 77,000, the smallest increase since July 2024. Expectations were for an increase of 140,000, while the previous figure was 183,000. U.S. stock futures are fluctuating lower.

When to Start Buying the Dip?

  1. As long as the economy doesn't truly fall into a recession, there will be some opportunities to buy the dip after such declines. Similarly, the market won’t just go straight down; there will be opportunities for rebounds even if the overall trend is downward.

  2. When the market experiences a significant pullback (e.g., more than 15%) and economic data clearly weakens, the Fed will likely resume rate cuts, and the market will start to rise again.

In conclusion, the best approach right now is to maintain a relatively low position or hedge against risks, and wait for a larger pullback triggered by the continued escalation of tariffs and weakening economic data before considering buying the dip.

How do you view dip buying now?

Is a bad move or value investing to DCA?

Will US market drop 15% or more?

Leave your comments and also post to win tiger coins~

[Event] How To Pick Quality Companies When It Is In The Dip?
Since the beginning of the year, the market has been continuously declining, with the S&P 500 losing $5 trillion in value over 16 days. The price-to-earnings ratios of several star stocks have dropped to lower levels. While Nvidia's forward PE remains around 25, its PEG is only 0.73, indicating it is undervalued. For companies that are not yet profitable, one can look at P/S or P/B ratios. Additionally, ROA and ROE can be used to filter undervalued, high-quality companies. Do you have any tips or indicators for selecting good companies during a market downturn?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • ECLC
    03-05
    ECLC
    Buying the dip of a good stock that is not overvalued may not a bad move for possible bounce. But considering the latest happenings, just be prepared for any potential further dips.
  • Xian789
    03-05
    Xian789
    I want have a good return in investing, but I don't have a lot time and knowlegde, so I choose DCA VOO everyday 😊🙏
  • JohnPong
    03-06
    JohnPong
    个人还是倾向买入吧 只要特斯拉和英伟达把科技推到一个新的高度 是翻几倍的成长了 机器人 自动驾驶 ai助理
  • highhand
    03-06
    highhand
    went the market drops a certain percentage, as value investors, we should buy at support levels of undervalued stock. no emotions. just buy according to your allocation.
    For trading, if your stop loss is hit and market is weak. you can choose to stay out until market recovers before starting to trade again. these are my guidelines.
  • icycrystal
    03-07
    icycrystal
    being consistent is probably good...

    US stocks continue to decline, especially with star stocks like Nvidia and Tesla, which have fallen 13% and 32% respectively this year. Many investors have started to buy the dip, but analysts believe the market hasn't fully dropped yet and caution against rushing to catch the bottom.

    @Shyon @Aqa @TigerGPT @SPACE ROCKET @koolgal @LMSunshine @rL @Universe宇宙 @GoodLife99 @HelenJanet

    How do you view dip buying now?

    Is a bad move or value investing to DCA?

    Will US market drop 15% or more?

    Leave your comments and also post to win tiger coins~

    • Shyon: 
      Thanks yo
    • TigerGPT: 

      As an AI financial analyst, I can provide you with some insights on dip buying and the current state of the US market.

      Dip buying refers to a strategy where investors buy stocks during market downturns, hoping to capitalize on the subsequent recovery. It can be a viable strategy for long-term investors who believe in the fundamentals of the stocks they are buying and have a sound investment thesis. However, it is important to carefully assess the market conditions and exercise caution when implementing this strategy.

      Regarding the current situation, it is worth noting that the US stock market has experienced a decline, especially with stocks like Nvidia and Tesla seeing significant drops. While some investors may see this as an opportunity to buy the dip, analysts caution against rushing into the market. They believe that the market has not fully dropped yet and anticipate a larger pullback triggered by factors such as the continued escalation of tariffs and weakening economic data.

      The decision to buy the dip ultimately depends on an individual's investment goals, risk tolerance, and analysis of the specific stocks in question. Value investing through Dollar-Cost Averaging (DCA) is a strategy where investors consistently invest a fixed amount of money in a particular stock or fund at regular intervals, regardless of market conditions. DCA allows investors to buy more shares when prices are low and fewer shares when prices are high, potentially reducing the impact of short-term market fluctuations.

      As for whether the US market will drop 15% or more, predicting short-term market movements is challenging and subject to various factors and uncertainties. It is important to consider a diversified investment portfolio, conduct thorough research, and seek professional advice when making investment decisions.

      Please note that the information provided is for reference purposes only and should not be construed as investment advice. Investing in the stock market carries risks, and it is essential to conduct your own analysis and consider your financial situation before making any investment decisions.

  • Aqa
    03-06
    Aqa
    This is a good time for dip buying. The current market situation closely resembles the 2018 trade war scenario: uncertainty over tariffs + high interest rates. However, some analysts believe the market may drop another 15%. Suggest Dollar-cost averaging and value investing the good AI stocks. Thanks @Tiger_comments @icycrystal @Shyon @SPOT_ON @1PC
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