Investors don't get rich buying the dip, strategist argues

Yahoo

26-04-2025

Conventional market wisdom is "buy the dip." However, Fundstrat Global Advisors managing director and global head of technical strategy Mark Newton argues that buying the dip isn't always the best strategy. He explains why in the video above.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
I want to dig into something that you said. You said you don't get rich trying to buy dips, and you know, given that so many of our viewers and users are retail investors who have been trained to try to do just that. In other words, buy the dip, right? Has been a meme now for a long time. Why, as a technical strategist, do you not want to try to always buy the dips?
Well, because momentum, uh, you know, in the words of my great, great grandfather, Isaac Newton, momentum continues until something pushes it hard enough so it'll change directions, right, in the opposite direction. Uh, look, it's tough. It's human nature. We all want to buy low, sell high, but in actuality, when you look at the stock market, it's almost always better to to buy high, sell higher, use a momentum based approach. It's worked for the last 15, 20 years as the number one factor in the stock market. So, uh, trying to buy things that you think are good value that have hit new 52 week lows is extraordinarily difficult to to to make work. And so I think that, you know, for me, if I want to invest in semiconductors, I wouldn't look at Intel. It had dismal results and the stock has done nothing in eight months. I would rather look at the Nvidias, look at the look at the Broadcoms, look at the the TSMs of the world, look at software stocks, which are acting a lot better than many semiconductors. Look for signs of sector rotation. That's the whole key. You want to be where the strength is, marry the technicals with the fundamentals, no need to try to be the hero and buy dips. I know it feels good when you buy dips, but honestly, it's so tough to do. There's countless examples of the last decade of things that are down at lows and you think it's they're they're value traps. They just don't work.
Can't you do better than this, do you think?
Yeah. So, so let the stock prove itself and and latch on as the technicals start to marry with the fundamentals. And my view, that's a roadmap for success.