MARKETS
Personal Finance and Investing
Is 'buy the dip' a good investing strategy? Here's why dollar-cost averaging may be better
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USA TODAY
If you have the cash to invest, should you dump all of it into the stock market at once, or spread it out over time?
It’s been a fierce debate on Wall Street for decades, especially now that "buy the dip" – a strategy in which investors buy up shares after they have dropped in price – has shown signs of fraying recently. This comes after that behavior among retail investors helped propel stocks higher for months following last year's pandemic-fueled sell-off.
Turns out, investing all of your money right away (lump-sum investing) historically leads to better returns over time versus a slow-and-steady approach with smaller increments invested in that span (dollar-cost averaging), according to recent research.