In this episode, Scott Becker breaks down the common question of whether to buy the dip, emphasizing that market timing is uncertain and that investors should instead focus on building a personalized, balanced allocation strategy that fits their risk tolerance and long-term goals.
Chapter 1: Who is Scott Becker and what is this episode about?
Chapter 2: What does 'buying the dip' really mean in the market?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's discussion, should I buy the dip or should you buy the dip? So here's the great question. People ask as though they could really time market and really understand when a dip is a dip or when it's just the start of a dip. There's all these different phrases, these idiomatic type phrases like
Chapter 3: Why shouldn't you try to time the market or sell into the dip?
Chapter 4: How can you determine the right stock-to-bond allocation for your investments?
Don't catch a dropping knife or something like that. Should I buy the dip or not buy the dip? Here's what you should do. One, you probably shouldn't sell into the dip. Two is you don't know when the dip is. What you really want to do is take the time to study what is the right allocation for yourself and your family in terms of what should be your balance of stocks versus bonds.
Chapter 5: Does age affect how much equity you should hold in your portfolio?
then what happens is you try and keep that allocation. And everybody's got a different sense of what that allocation should be. You know, the old adages, if you're young, you could have a much higher allocation equities because you could live for the long run and know that it'll likely bounce back.
The flip side is if you're a nervous Nelly, which some of us are, you ought to keep a balance of equities to bonds, to cash, so that you can sort of deal with this however it plays through.
I know 100 years ago when I was much younger, and so one of the first market professionals of my lifetime, I spent so much time on allocation studies to understand what allocation works for me from a behavioral finance perspective. This, of course, made me the investor version of a nervous deli or whatever you want to call it. But it is what it is. You got to figure out what works for you.
Buying the dip is the kind of stuff that Stupid people say advisor stay because nobody knows really what the dip is. You don't know if it's going to dip another 20% or not. What you do know is if you keep an allocation that's the right allocation for you, that you can live with the downside, win on the upside, then that's what you want to work towards is the right allocation for you.
Thank you for listening to the Becker Private Equity and Business Podcast. Thank you very, very much.
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