Test #2 · Video comes out Wednesday, Oct 21 · 12:00 PM ET
Buy the dip or invest now? We tested 30 years of real data
The video
The video comes out Wednesday, Oct 21 · 12:00 PM ET.
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The claim
Buy the dip: don't invest now, keep your cash ready, and buy after the market falls. It's everywhere. When stocks dropped in April 2025, CNBC reported that everyday investors put more than $3 billion into U.S. stocks on April 3, the largest daily amount on record in data going back to 2014. CNBC called buying the dip "the conventional market wisdom."
Source: CNBC, Alex Harring, April 10, 2025 (syndicated copy)
How we are testing it
- Someone gets $10,000 to invest on the first trading day of every month from January 1996 to December 2016: 252 start dates.
- Plan A, invest now: put it all in the S&P 500 with dividends reinvested (the SPY fund) that day.
- Plan B, buy the dip: keep the money in 3-month Treasury bills, earning interest, and buy the first day the S&P 500 closes 10% (or 20%) below its record. If it's already that far down, buy at once.
- Compare the two plans after 1, 3, 5 and 10 years, with real prices through October 2026.
- We also tried an automatic order that buys the moment the market touches the dip, a fresh dip measured from the day the money arrives, and spreading the money over 12 months. Waiting lost on average in every version.
- No fees, no taxes, and a perfect dip buyer who never hesitates: the best case for waiting.
The verdict
The verdict and every number come out with the video, Wednesday, Oct 21 · 12:00 PM ET. The free weekly email has the full numbers.
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More tests
Education and entertainment only. Not personal financial advice. Your situation is different; talk to a professional before deciding when and how to invest your money. Disclosure: I don't own an S&P 500 index fund. I do own some individual stocks, including Apple, which is part of the S&P 500. Nobody paid for this video.