🚨 Stock Market CRASHING! STOP! Don’t Buy the Dip Until You Watch This – 4 Strategies to Survive This

00:10:55
https://www.youtube.com/watch?v=kDmvq5nLhQg

Summary

TLDRIn today's video, Aman addresses the challenges of investing during a market downturn, where the phrase 'buy the dip' is often mentioned. He explains the risks associated with this approach, emphasizing the need for a structured strategy to navigate falling markets. Aman outlines four key strategies for safely buying the dip: percentage-based buying, utilizing moving averages for technical analysis, staggered investments to maintain flexibility, and focusing on fundamentally sound companies. He also stresses the importance of consistency in investing through methods like dollar-cost averaging, while highlighting the historical recovery of the stock market. Overall, the video encourages disciplined investing and the avoidance of emotional decision-making during market volatility.

Takeaways

  • πŸ“‰ Be cautious about blindly buying the dip.
  • πŸ’‘ Use a percentage-based buying strategy to manage risk.
  • πŸ“Š Rely on moving averages to guide your investments.
  • ⏳ Consider staggering your investments over time.
  • πŸ’Ό Focus on fundamentally strong companies during dips.
  • πŸ“ˆ Dollar-cost averaging is a solid long-term strategy.
  • 😌 If anxious about volatility, avoid lump-sum investing.
  • πŸ” Look for companies with strong fundamentals before buying.
  • πŸ“… Stay consistent and disciplined in your investment approach.
  • πŸš€ Historically, the stock market recovers from downturns.

Timeline

  • 00:00:00 - 00:05:00

    The stock market is facing significant declines, prompting many to consider the strategy of 'buying the dip', which means purchasing stocks after price drops with the hope they will recover. However, an important question arises: how can investors determine if a dip is temporary or the beginning of a more extensive decline? Blindly investing in a falling market carries risks, making it essential to have a structured strategy in place to avoid inadvertently losing money.

  • 00:05:00 - 00:10:55

    To navigate this volatile market, investors can employ several strategies: 1) the percentage-based buying strategy involves purchasing set amounts at specific percentage drops; 2) the moving average strategy relies on technical indicators to identify buying opportunities; 3) the staggered buy approach suggests investing in smaller increments over time; 4) the fundamental value buying focuses on quality companies with strong fundamentals. Additionally, a hybrid strategy of dollar-cost averaging and lump-sum investing can provide a balanced approach in uncertain times. Ultimately, consistency and discipline are key to long-term investment success.

Mind Map

Video Q&A

  • What does 'buy the dip' mean?

    'Buy the dip' refers to an investment strategy of purchasing stocks after their prices have dropped, anticipating they will recover.

  • What are the risks of buying the dip?

    Buying the dip blindly can be risky as the market could continue to decline after your purchase.

  • What is a percentage-based buying strategy?

    This strategy involves investing a set amount every time the market drops by a certain percentage.

  • How does the moving average strategy work?

    It uses technical indicators like the 200-day moving average to determine potential buy opportunities.

  • What is dollar-cost averaging?

    Dollar-cost averaging involves investing a fixed amount of money at regular intervals, regardless of market conditions.

  • What should investors look for in companies before buying during a dip?

    Investors should target companies with strong earnings, low debt, and competitive advantages.

  • Can the stock market recover after a downturn?

    Historically, the stock market has always recovered from downturns and often reaches new highs.

  • What should I do if I feel anxious about lump sum investing?

    If anxious about lump sum investing, consider using other strategies like dollar-cost averaging.

  • What are the signs that a dip might not recover?

    If a company's fundamentals are crumbling, it may indicate the dip won't recover.

  • What is the recommended approach if I have a large sum to invest?

    Invest the money as a lump sum and avoid watching the market closely to reduce anxiety.

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  • 00:00:00
    stocks keep dropping and you are going
  • 00:00:02
    to hear people say buy the dip buy the
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    dip what buy what dip this thing keeps
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    dipping the stock market keeps falling
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    so I'm buying the dip today and it keeps
  • 00:00:14
    dipping tomorrow and I'm actually not
  • 00:00:16
    buying the dip I'm throwing my money
  • 00:00:19
    away by investing in the stock market
  • 00:00:21
    right now I'm catching that falling
  • 00:00:24
    knife hey guys it's Aman from RR journey
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    and on today's video I am going to help
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    you guys with this issue because a lot
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    of you guys are seeing the stock market
  • 00:00:35
    go down and you are hearing Talking
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    Heads on these news networks talking
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    about Bu The Dip when you are probably
  • 00:00:43
    sitting at home thinking well what does
  • 00:00:46
    that really mean so buying the dip is an
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    investment strategy where you purchase
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    stocks after their prices have dropped
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    hoping they'll recover and go even
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    higher in the future the logic is simple
  • 00:00:59
    if a stock was worth $100 yesterday but
  • 00:01:02
    now it's $80 today you might see this as
  • 00:01:05
    a discounted buying opportunity and so
  • 00:01:08
    you are buying the dip but here's the
  • 00:01:10
    catch how do you know if this dip is
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    temporary and is a buying opportunity or
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    just the start of an even bigger drop
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    what if you buy now and it falls another
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    10% another 20% what do you do that's
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    why buying the dip blindly is risky
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    instead instead you need a strategy a
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    structured way to enter the stock market
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    that doesn't rely on guessing the bottom
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    so on today's video to help you devise
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    your own strategy I'm going to talk
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    about four strategies to help you safely
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    buy the dip and an additional strategy
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    which we use which we think is the
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    ultimate way to invest in the stock
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    market in a situation like this so let's
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    start with the numbers how bad is the
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    stock market right now since the stock
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    market peaked in January of 2025 the S&P
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    500 is down more than 10% the NASDAQ is
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    down almost 15% and when you look at
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    individual stocks Tesla is down over 50%
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    losing $700 billion in its value and
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    some of the other Tech heavyweights the
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    fan favorites like Nvidia Nvidia is down
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    almost 20 5% meta is down over 20% Apple
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    down almost 20% Amazon 20% Microsoft 20%
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    all these Tech heavyweights that make up
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    a huge part of the stock market are down
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    more than 20% now these numbers are ugly
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    but is this the bottom it could or it
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    couldn't be we have seen the stock
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    market Fall a lot more in the past so
  • 00:02:57
    how do you invest in this type of Market
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    well this brings us to the strategies
  • 00:03:03
    that advanced investors use when they
  • 00:03:06
    are investing at a time like this the
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    first one is the percentage-based buying
  • 00:03:10
    strategy where you buy every x% drop in
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    other words instead of guessing the
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    bottom this strategy involves buying a
  • 00:03:19
    set amount every time the market drops
  • 00:03:22
    by a certain percentage for example if
  • 00:03:25
    the S&P 500 is down 5% you buy a small
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    portion if it drops another 5% you buy
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    another small portion if it falls
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    another 5% you increase your purchases
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    this approach helps you take advantage
  • 00:03:42
    of falling prices without going all in
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    too early if the market rebounds sooner
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    than expected you've still built a
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    position the next strategy is the moving
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    average strategy rather than relying on
  • 00:03:56
    emotions this strategy uses technical
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    indicators like the 200 day moving
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    average to decide when to invest in the
  • 00:04:04
    stock market so if a stock or an index
  • 00:04:07
    Falls below its long-term moving average
  • 00:04:10
    it signals a possible buy opportunity
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    this method helps you filter out
  • 00:04:16
    short-term noise and it gives a
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    data-driven approach to buying the dips
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    many professional investors watch these
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    moving averages closely to determine
  • 00:04:27
    whether a market is oversold or if if a
  • 00:04:30
    deeper decline is underway the next
  • 00:04:32
    approach is called the staggered Buy in
  • 00:04:35
    approach with this approach you break up
  • 00:04:37
    your investments into smaller bites over
  • 00:04:40
    time so let's say you have $10,000 to
  • 00:04:44
    invest instead of investing it all at
  • 00:04:46
    once you put in 2500 now while the
  • 00:04:49
    market is down if it drops further you
  • 00:04:51
    invest another 2500 in a month and you
  • 00:04:55
    repeat this process giving yourself
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    flexibility if the market continues used
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    to fall this way if the market recovers
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    quickly you are already invested but if
  • 00:05:06
    it keeps falling you still have cash to
  • 00:05:09
    take advantage of even better prices the
  • 00:05:12
    next approach is what I like to call the
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    fundamental value Buy in where you are
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    only buying quality companies that are
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    experiencing a temporary dip this is
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    what Warren Buffett likes to call Value
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    investing and so let's face it not all
  • 00:05:29
    stocks are going to recover some will
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    never bounce back and it is a time like
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    this when companies are being more
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    scrutinized that this becomes more
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    apparent the companies that are built
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    completely off of speculation when
  • 00:05:44
    investors start to look at the
  • 00:05:47
    fundamentals and the financials of those
  • 00:05:49
    companies they realize that these
  • 00:05:51
    companies are built on a house of cards
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    but investors that are looking at
  • 00:05:56
    companies and they are finding companies
  • 00:05:58
    with strong B balance sheets these
  • 00:06:01
    companies are the types of companies
  • 00:06:02
    that you want to invest in at a time
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    like this you see this strategy focuses
  • 00:06:06
    on buying great businesses at a discount
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    rather than buying just because a stock
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    is down so you want to do this by doing
  • 00:06:14
    three things before you consider buying
  • 00:06:16
    a stock the first is look for companies
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    with strong earnings low debt and
  • 00:06:22
    competitive advantages the second is
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    avoid companies that are struggling with
  • 00:06:27
    fundamental business problems third
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    focus on sectors that are likely to
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    rebound strongly when the stock market
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    recovers for example if apple or Nvidia
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    Falls 20% but their core businesses are
  • 00:06:40
    still strong that could be a buying
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    opportunity but if a company's
  • 00:06:44
    fundamentals are crumbling the dip might
  • 00:06:47
    not recover I think Tesla is a prime
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    example of a company that has
  • 00:06:53
    fundamentally changed it is a company
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    that at one time had a great advantage
  • 00:06:58
    in the market but with increased
  • 00:07:00
    competition with sentiment surrounding
  • 00:07:03
    the product changing significantly will
  • 00:07:06
    Tesla recover it's down right now about
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    50% and they are not selling a lot of
  • 00:07:12
    cars like they used to so this company
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    is going to be struggling to recover now
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    all of these strategies that we have
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    talked about there is one strategy that
  • 00:07:21
    is kind of floating around all of these
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    and it's the one that we like to use
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    when we invest in the stock market
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    it's the same one that we have used our
  • 00:07:32
    entire investment career we have a
  • 00:07:34
    strategy that involves dollar cost
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    averaging and lump summing you see our
  • 00:07:40
    idea is to invest in the stock market
  • 00:07:43
    sooner rather than later so whenever we
  • 00:07:45
    have a large amount of money that is
  • 00:07:48
    available to invest in the stock market
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    we usually invest it sooner rather than
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    later by lumps summing it into the
  • 00:07:54
    market but whenever we are receiving
  • 00:07:57
    income on a weekly or a monthly basis we
  • 00:08:00
    invest that money by dollar cost
  • 00:08:02
    averaging it into the market you see at
  • 00:08:05
    a time like this where there is a lot of
  • 00:08:07
    volatility people get nervous first of
  • 00:08:11
    all let's face the bottom line no one
  • 00:08:13
    can predict the direction of the market
  • 00:08:16
    in the short term but historically we
  • 00:08:18
    have seen the stock market always
  • 00:08:20
    recover and go higher my advice to you
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    is you should do whatever you feel
  • 00:08:25
    comfortable with but keep in mind that
  • 00:08:28
    you will be very anxious if you are
  • 00:08:30
    watching your portfolio at a time like
  • 00:08:32
    this and so if you do have a large sum
  • 00:08:35
    of money and you are interested in
  • 00:08:36
    investing in the market right now as a
  • 00:08:38
    lump suum rather than dollar cost
  • 00:08:40
    averaging then my recommendation is to
  • 00:08:43
    do it and walk away don't think about it
  • 00:08:46
    anymore because most people fail at lump
  • 00:08:50
    suum investing because of the anxiety
  • 00:08:52
    involved in it they think they have a
  • 00:08:54
    highrisk tolerance and so they say I
  • 00:08:56
    have $10,000 I'm going to put that
  • 00:08:58
    $110,000 in the stock market but when
  • 00:09:00
    they see that 10,000 go to 9 to8 they
  • 00:09:03
    get nervous pull it out and they've lost
  • 00:09:06
    money because they didn't stay the
  • 00:09:08
    course they didn't stay in as a
  • 00:09:10
    long-term investor but a long-term
  • 00:09:12
    investor can feel completely comfortable
  • 00:09:15
    lump summing $10,000 in the market and
  • 00:09:17
    watching it fall all the way to 5,000
  • 00:09:19
    because they know over the long term
  • 00:09:22
    that money is going to recover and go
  • 00:09:24
    higher and so if you are a person that
  • 00:09:26
    will be anxious about seeing a large sum
  • 00:09:29
    of money that you put in the stock
  • 00:09:30
    market go up and down then lump summing
  • 00:09:33
    is probably not for you you are probably
  • 00:09:35
    better off with one of these other four
  • 00:09:37
    strategies that are a take on dollar
  • 00:09:39
    cost averaging and dollar cost averaging
  • 00:09:42
    is a great way to invest in the stock
  • 00:09:44
    market because you are investing a fixed
  • 00:09:46
    amount of money every week every month
  • 00:09:48
    whether the market is up or down it
  • 00:09:50
    really Smooths out the purchase price
  • 00:09:53
    over time avoiding emotional investing
  • 00:09:56
    and it also ensures you're always taking
  • 00:09:59
    advantage of Market declines without
  • 00:10:02
    Panic selling or timing mistakes history
  • 00:10:05
    has proven that staying in the market is
  • 00:10:07
    more important than timing the market
  • 00:10:10
    since 1926 the S&P 500 has recovered
  • 00:10:14
    from every single bare Market eventually
  • 00:10:17
    hitting new highs so the bottom line
  • 00:10:19
    instead of waiting for the perfect
  • 00:10:21
    moment to invest in the stock market
  • 00:10:23
    focus on consistency keep investing stay
  • 00:10:27
    disciplined and let time do the work I
  • 00:10:31
    hope that this video has given you guys
  • 00:10:32
    food for thought when you are developing
  • 00:10:35
    your investment strategy at a time like
  • 00:10:37
    this and so if you like this video
  • 00:10:39
    please give it a thumbs up subscribe to
  • 00:10:42
    our Channel and join the journey
  • 00:10:54
    [Music]
Tags
  • Buy the Dip
  • Stock Market
  • Investing Strategies
  • Dollar-Cost Averaging
  • Percentage-Based Buying
  • Moving Averages
  • Fundamental Investing
  • Market Recovery
  • Emotional Investing
  • Long-term Investing