Last week, I reviewed the buying the dip stocks for how much they could add to our funds. Turns out not much. I only buy a few shares since I'm just betting on a rebound to make a few dollars. I am hesitant to hold for very long due to volatility and sell for quick gains of 5-15%. A few shares times a few dollars doesn't amount to much of an increase. I enjoy the fun and excitement of the gain, but it really doesn't grow our investments much.
Looking back, the big gains have come from large investments in a diversified portfolio, my company's stock, or a lucky buy and hold tech stock such as Alphabet. Not from buying multiple stocks on the dip.
Over time, I've ended up positive on my buy the dip stocks, but not by much.
Lesson learned. It's fun to buy the dip, guess right and collect the winnings. But it's not a sustainable investment strategy for me. For the long run, I would have done better investing in a total market index, holding and collecting the gains many years later. Not as much fun, but much better results.
I'm definitely putting my kids' accounts in market index funds for their future.
This is not financial advice. Please consult a professional advisor.
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