DEFINITION of 'Buy The Dips'
A slang phrase regarding the practice of purchasing stocks following a decline in prices. After a significant dip in the price of a security or stock index, investors should increase positions or purchase different stocks to capitalize on what is seen as an eventual upswing.
INVESTOPEDIA EXPLAINS 'Buy The Dips'
The concept of buying dips is based on market fluctuation. Because the market is volatile, any given dip in prices should eventually rise back up. By purchasing stocks right after a dip, investors are essentially buying shares at a discounted sale price.
Like all trading strategies, buying the dips is not a sure thing, because some stock price drops are due to negative changes in the underlying company's fundamentals. For example, investors who followed this strategy around the bursting of the dotcom bubble may have lost a lot of money because many internet companies lacked a proper revenue-generating business model.
A sudden and significant decline in the value of a market. A ...
1. A statistical measure of the dispersion of returns for a given ...
1. An economic cycle characterized by rapid expansion followed ...
A company that embraces the internet as the key component in ...
A slang term for a decline in the overall value of the stock ...
definition of a commercial real estate loan