{"id":9314,"date":"2021-02-11T15:36:22","date_gmt":"2021-02-11T15:36:22","guid":{"rendered":"https:\/\/zackspcg.com\/blog\/?p=9314"},"modified":"2022-02-26T13:05:55","modified_gmt":"2022-02-26T13:05:55","slug":"waiting-for-a-dip-to-invest","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/waiting-for-a-dip-to-invest\/","title":{"rendered":"Waiting For a Dip to Invest"},"content":{"rendered":"\n

Zeke M. from Detroit,\nMI asks: <\/em>Good Morning Mitch, I managed to stay invested through 2020 and\nhave seen the market soar to new highs. That said, I\u2019ve been accumulating cash\nover the last year and have been waiting for a dip to put it to work. Any\nthoughts on when\/how to deploy that cash?<\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thanks for writing, Zeke, and my hat is off to you for\nstaying invested throughout the last year. Staying invested was no easy feat,\ngiven the steep bear market and all the uncertainties surrounding it.\nUncertainties, I should add, that largely still exist today. My advice to\ninvestors throughout the last year was to keep a steady hand \u2013 I\u2019m glad you\nfollowed through.<\/p>\n\n\n\n

Before I answer your question, I\u2019d like to start with a\nquestion of my own: how long have you\nbeen waiting on the sidelines with your accumulated cash? <\/em>I ask this\nquestion because I often see investors looking to \u201cbuy the dip,\u201d but I rarely\nsee investors taking stock of how much benefit was gained from waiting.<\/p>\n\n\n\n

Let me explain: as I write, the S&P 500 is trading\naround 3,900. If you\u2019re waiting for a -10% or a -15% dip, which historically is\na healthy correction range, then that means you\u2019re waiting for the S&P 500\nat either 3,510 (-10%) or 3,315 (-15%).1<\/sup> The S&P 500 traded at\nthose levels in October and November of last year. Were you waiting on the\nsidelines then? In other words, would you have been better off just investing\nyour accumulated cash in September or October, and starting the compound\ninterest clock then? Remember, it\u2019s time in the market \u2013 not timing <\/em>the market.<\/p>\n\n\n\n

____________________________________________________________________________<\/p>\n\n\n\n

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