r/investing • u/NervousUpstairs3879 • 2d ago

How to know when to invest in dips?

I am by no means an actual investor but since all the stocks are dropping I thought it would be a good time to invest, I’m thinking about investing in apple stocks (19.09% drop in past month) but I don’t know when the right time is? Should I wait for it to go down a bit more or play it safe and invest now?

2 Upvotes

60% Upvoted

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9

u/joepierson123 2d ago

You don't, in 2000 the NASDAQ dropped 80% over 2 years and took 13 years to recover in 2020 it took a couple months to recover from the lows. 

4

u/Primary_Volume_8144 1d ago

Averaging down into ETF still the way to go, if your investment horizon is very long and you only use money you won’t need for many years. Most people will not have build their Position at the ath before crash and people that just continued monthly savings plans back then also bought a ton of cheap shares at and near bottom for 13 years. They are extremely well off now.

It becomes more important to time a strategy when you’re planning to retire in >5 years and rebalance your portfolio. But as always, everyone needs to make their own decisions.

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u/NotGastly_ 2d ago

Nobody really knows how low it can go. Just pick a time and just use an amount you’re fine with losing. If anything buy some today if you’re fine with the price and DCA if it does down more.

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u/NervousUpstairs3879 2d ago

I was mainly asking because I never really looked at the markets and thought that maybe the investors from Covid or when china banned crypto or when ftx shut down would know a bit more about how far a dip could possibly go, but thank you for the advice I think I’ll wait just a couple more days and then put about $100 into apple

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u/Peace_and_Rhythm 2d ago

If you want to become an investor, pick a mutual fund and start with DCA. It's boring. It takes years. You will experience up and down markets. Stay the course, never sell and over time you will be successful.

If you want to play the market, time it, monitor the market on a daily basis, go the ETF way. But this is not investing.

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u/NervousUpstairs3879 2d ago

I might be wrong but ETF means it’s one stock that is spread across many and plays on the more broad market, so I mean this in the least rude most curious way possible but could I not just invest in ETFs like regular stocks?

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u/Peace_and_Rhythm 2d ago edited 2d ago

You could. They both trade on exchanges. You need a brokerage account, same as individual stocks. The only advantage I see is you get instant diversification which reduces your risk of just one company. Generally, ETF's have lower expense ratios. Most ETF's disclose their holdings daily so you know exactly what you are invested in. ETF's are generally very liquid. So yes, in terms of the mechanics of buying and selling them, you are correct.

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u/Peace_and_Rhythm 2d ago

But there is no one, single universally accepted term for traders, but you can be a Swing Trader, Short Term Trader,Momentum Trader or Technical Trader, Position Trader, Trend Follower...

But if you want to be an investor, this is long term, years or decades.

3

u/FaithlessnessDull336 2d ago

Do not invest in Apple atm, they are heavily subjected to tariff from both side. A US company that has majority of its production in China, sounds incredibly deathly. Might get another 5-10% drop but wait until the EU reaction with tariff from 🍊man, might be retaliation coming next week, market drop a bit more. Then I might considering buying into the market slowly

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u/Rizzle_605 2d ago

I agree, but my plan with Apple is to not hope I time it right and just buy little by little at different price drops. Hedging my bets.

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u/NervousUpstairs3879 2d ago

When it’s explained this way it actually is very helpful, I like that idea

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u/FaithlessnessDull336 2d ago

Still too high, especially Chyna might retaliate harder by start investing Apple like what they did with Google a month ago. This is highly risky with no upside. But you do you, good luck

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u/Rizzle_605 2d ago edited 2d ago

I don't necessarily disagree, although "there is no upside" is a hyperbolic statement. With that said, we're both still guessing as to how the market and world will react which is why I buy in small increments and don't go all in. Hedge to be somewhat more safe.

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u/NervousUpstairs3879 2d ago

So what I get from this is that I should invest when it drops about another 10% and slowly put money in? My issue is with the last part that I’m 15 and don’t have a lot of money so my little bit id be putting in would be almost nothing like $10-$20

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u/FaithlessnessDull336 2d ago

You are young so the amount is not relevant, it’s that platform charge fixed fees and it might outweighs the gain so maybe save up and do a lump sum of 100-500 or something like that to minimize the fees. For the 10% drop I meant the market which is stock sticker ‘Spy’ which is the market as a whole. For individual stock like Apple, my price target is around 140 or something. But do your own research, this is no financial advice.

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u/NervousUpstairs3879 2d ago

Thank you I’ll look into the links I’ve been sent and try to use keywords from it to learn more

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u/Rizzle_605 2d ago

I have alerts set on my phone when it drops or rises to certain price points and I'll buy a few shares at each of those drops. That's my plan for stocks like Apple and Walmart that I expect to see drop but will eventually recover.

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u/NervousUpstairs3879 2d ago

I’m actually very excited about this, I’m 15 and have been wanting to invest for so long but my only worry is that right now all that’s available for me is investing though cash which takes 24 hours to put the money in and 24 hours to sell it so I don’t think buying the 5% drop and selling the 5-10% increase would really work in my situation

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u/Future_Class3022 2d ago

You should buy broad index funds, including global funds. You have so much time on your side. This is a great opportunity for you!

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u/NervousUpstairs3879 2d ago

I don’t think I can since cash app only really has big crypto’s and stocks

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u/NervousUpstairs3879 2d ago

Also to add onto this they don’t even have the s&p500

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u/Future_Class3022 2d ago

Does it have VOO?

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u/NervousUpstairs3879 2d ago

Oh sorry I’ve been mistaken, it does have the s&p 500. It has IVW, VOO, and IVE

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u/Future_Class3022 2d ago

Way better bet than picking individual stocks. It's the approach Warren Buffett recommends to individual investors.

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u/NervousUpstairs3879 2d ago

Thank you, this was very helpful. I just followed VOO and I think that’ll be my new choice, but I do have one more question. So cash app makes you wait about 24 hours for your money to go in and come out of stocks, will this be a problem?

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u/Future_Class3022 2d ago

I haven't used it for investing, so I can't answer that. Sorry!

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u/RJ5R 2d ago

Props to you for being just 15 and being on a reddit investing sub. Props to you big time.

If I were you, I would be buying VT for the next 50 years. Compounding returns will be your best friend.

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u/NervousUpstairs3879 2d ago

Do you have an idea for if you were 15 how much you’d try to put into VT and VOO? (Each)

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u/RJ5R 2d ago

VT is the Total World Market. If you add VOO, it means you are tilting to top 500 US, since VT owns top 500.

As far as how much, it all depends on how much you have to put in. If you are asking about allocation, my recommendation is to just do 100% VT

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u/Future_Class3022 2d ago

Which app? See if it includes VT for example.

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u/NervousUpstairs3879 2d ago

Cash app, like the US app similar to PayPal

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u/Future_Class3022 2d ago

It has lots of ETFs

https://www.investopedia.com/articles/personal-finance/121815/buffetts-9010-asset-allocation-sound.asp

How to buy ETFs on cash app https://youtu.be/F9D1FSW5OUY?si=4Vyr2In4gX2aA6jL

Just a heads up, prices may still fall further. Just keep investing over the long term. The more you buy at low prices, the better.

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u/NervousUpstairs3879 2d ago

So you think that VOO would be the best choice for an index fund?

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u/Future_Class3022 2d ago

It depends on if you want to invest in the US right now, but for purchasing US stocks it's a great option.

A global fund such as VT is another good option. It will give you balance in case US performance is crappy for a while.

There's a sub specific to ETFs that's really helpful.

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u/NervousUpstairs3879 2d ago

This is the google reason for it

“Market Hours: Cash App operates within standard market trading hours, which are typically 9:30 AM to 4:00 PM EST, Monday through Friday. After-Hours Orders: If you place an order outside of these hours, it will be executed during the next trading day. “

Also I just followed VT too

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u/Rizzle_605 2d ago

I'm not selling anything unless I'm confident there will be more large drops and I haven't lost too much at this point. Like, I sold Walmart at 88 for a ~50% gain and plan to monitor and buy in again at a price i feel comfortable with. I'm planning to do more research this weekend and determine when I want to get back in.

With Apple, I'm not selling anything. Just going to buy it as it drops at different levels. I feel confident about their long term future and any drop will eventually come back up.

Of course I could be wrong and lose money lol.

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u/Fongernator 21h ago

Trust your gut

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u/jpcarsmedia 2d ago

No one knows. There will be consequences to this like more layoffs which could cause the market to keep dropping.