BUY THE DIPS?

I have read in many forums "just buy the dips now," buy the corrections because it has been working fine in the last 5 years. I am not fully convinced that there is any general rule on the market which works forever, including this too. Buy the dips has been good for years, but one day it won’t work anymore for sure. I would ask the dip buyers that, does it mean it will work that way for the next 20 years?

If you are trading from the past data and chart history and you typically drive by looking out your rear view mirror, the answer is yes. But Mr. Market has much more tricks what we can imagine and always does which creates the biggest pain.

Buy the dips sounds easy, but I am suspicious not all the guys have done in the last years as they say. I guess they really did panic and were scared to buy at big sell offs like at those severe sell-offs:

Each year we experienced double digit corrections – the exception is 2013. Normally, more than 10% drop creates huge pessimism and I am sure those very optimistic guys were so scared and pessimistic and weren’t brave enough to pull the trigger and add more to the losing trades. Retrospectively sounds easy, but at those days was really hard, only few people could make it.

All in all buy the dips strategy working many times, especially in bullish market, but don’t forget as an old saying on Wall Street is, "They don't ring a bell when a bear market starts."

The BFM Assets Team.