My approach to buying the dip these days is pretty unsophisticated.
I start by working backward from the worst-case scenario: if this money drops another 40% tomorrow before I make a move, how much can I afford to put in today at most? The answer is usually so small it makes me uncomfortable—but that’s exactly what leaves me with ammo when things really hit the depths.
The second thing I do is split my dip-buying money into three parts: one for emotions (when I’m itching to buy, I have to buy a little), one for price (place orders at stepped intervals based on the decline), and one for time (wait for signs that things have stabilized).
The emotional portion is always the first to run out, so it has to be the smallest.
That’s not a strategy. It’s a way to protect myself from myself.
I start by working backward from the worst-case scenario: if this money drops another 40% tomorrow before I make a move, how much can I afford to put in today at most? The answer is usually so small it makes me uncomfortable—but that’s exactly what leaves me with ammo when things really hit the depths.
The second thing I do is split my dip-buying money into three parts: one for emotions (when I’m itching to buy, I have to buy a little), one for price (place orders at stepped intervals based on the decline), and one for time (wait for signs that things have stabilized).
The emotional portion is always the first to run out, so it has to be the smallest.
That’s not a strategy. It’s a way to protect myself from myself.
