{"id":42627,"date":"2026-03-31T13:12:10","date_gmt":"2026-03-31T13:12:10","guid":{"rendered":"https:\/\/financialrush.com\/?p=42627"},"modified":"2026-03-31T13:12:10","modified_gmt":"2026-03-31T13:12:10","slug":"should-you-buy-the-dip-when-the-stock-market-is-down-what-to-know","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=42627","title":{"rendered":"Should you \u2018buy the dip\u2019 when the stock market is down? What to know"},"content":{"rendered":"

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Izusek | E+ | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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After weeks of stock market declines<\/a> amid the U.S.-Iran war, some investors may be eyeing a chance to \u201cbuy the dip,\u201d<\/a> or purchase assets at temporarily lower prices, which can offer higher returns when the market rebounds<\/a>. But the move carries risks, some advisors say. <\/p>\n

Buying the dip was popular among retail investors<\/a> during key market drawdowns<\/a> in 2025. But the trend has slowed<\/a> since the start of the Middle East conflict. <\/p>\n

The strategy \u201csounds great, but timing it is really hard\u201d since no one can predict future market moves, said certified financial planner Joon Um, managing owner of financial firm Secure Tax and Accounting in Hayward, California. <\/p>\n

If you\u2019re experiencing \u201cFOMO\u201d about buying opportunities during the current downturn, Um said, keep in mind that \u201cmissing one dip won\u2019t hurt you, but making an emotional decision might.\u201d <\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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The Dow Jones Industrial Average<\/a> on Friday closed nearly 800 points lower<\/a> at 45,166.64, while the S&P 500<\/a>\u00a0shed 1.67% and fell to a seven-month low, ending the session at 6,368.85. The tech-heavy\u00a0Nasdaq Composite<\/a>\u00a0dropped 2.15%, sliding to 20,948.36.<\/p>\n

There was some market relief on Monday after comments from Federal Reserve Chair Jerome Powell<\/a> calmed investors\u2019 fears about an interest rate hike triggered by rising energy prices<\/a>. <\/p>\n

In a Truth Social post<\/a> earlier Monday, President Donald Trump<\/a> said that \u201cgreat progress has been made\u201d in Iran negotiations, but threatened to destroy the country\u2019s oil infrastructure<\/a> if a peace deal didn\u2019t happen \u201cshortly.\u201d<\/p>\n

The S&P 500 ultimately closed lower<\/a> on Monday, bringing it closer to correction territory, down about 9% from its 52-week intraday high. But stock futures were higher on Tuesday morning after Trump reportedly said he was willing to end the war even if the Strait of Hormuz remained mostly closed. <\/p>\n<\/div>\n

Buying the dip for longer-term goals<\/h2>\n
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During a market drawdown, some investors panic-sell<\/a>, while others seek discounted assets. If you fall into the latter category, it may be tempting to quickly dump cash into investments for longer-term goals, such as your retirement. <\/p>\n

But typically, the strategy works best as part of a broader plan, according to Jon Ulin, a CFP and managing principal of Ulin & Co. Wealth Management in Boca Raton, Florida.<\/p>\n

In some cases, investors maintain a certain level of \u201cdry powder,\u201d or cash for buying opportunities, which can be deployed at pre-determined prices for specific assets. Ulin recommends doing this with a diversified portfolio, rather than a single stock or assets like gold or bitcoin. <\/p>\n

But \u201csuccess requires discipline,\u201d Ulin said. These purchases should always \u201cfit a long-term plan rather than a short-term reaction\u201d to market volatility, he said.<\/p>\n<\/div>\n

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Of course, hoarding cash while waiting for rock-bottom prices before entering the market can also be risky, experts say. <\/p>\n

There\u2019s a cost to missing the market\u2019s best-performing days<\/a>, which often closely follow the worst days, according to JPMorgan Asset Management\u00a0research. <\/p>\n

If you\u2019re currently sitting on a larger lump sum, Ulin recommends \u201cdollar-cost averaging,\u201d or investing fixed amounts during set intervals, over three or four months rather than \u201cwaiting on the sidelines for clarity that rarely arrives.\u201d <\/p>\n<\/div>\n

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