Is Now the Time to Buy The Dip? – Forbes Advisor Australia
Investors who buy the dip are looking to purchase a stock only when it has fallen from its recent peak. They assume that the price decline is temporary or a short-term aberration, and that the dip is an opportunity to buy shares at a bargain price.
Typically, people who buy the dip already own shares of a company whose price has declined from a recent high. Dip buyers generally are looking to build a larger position in a stock, and use temporary price declines—aka “dips” in the share price—to increase their holdings.
Those who buy the dip expect the stock’s price to bounce back and exceed the purchase price. As the investor buys more shares of a stock they already hold during a dip, they “average down” to lower…
