Should you 'buy the dip'?

**Arpit Agal** (0:00)
I mean, I always say this, you never lose money on a bad stock. You lose money when you buy a stock, when you're calm, and when you're trying to sell it, when you're scared.
And it's all about emotions. The investing decision should always be done in a, I'll say, thoughtful manner. And that's where you need to take out your emotions from your investing process.

**Sue-Ann Tan** (0:24)
Everybody says, buy low and sell high. But what does buying the dip really mean? And is it really a good strategy to go all in when everyone else is pulling out from the market? Hi, I'm Sue-Ann Tan, and you're listening to Headstart On Record, a show that gives you a head start in your personal finance career and life. In the studio with me today are our market gurus, Arpit Agal from Syfe and Chua Inn Chong from PhillipCapital.
Hi, guys.

**Arpit Agal** (0:48)
Hello.

**Sue-Ann Tan** (0:48)
It's so good to have you here today on the pod.
And actually two episodes ago, I did an episode on investing in tech stocks and whether tech stocks are still a good investment. And then we know that last week something happened, which is that there was quite a massive sell-off on tech stocks. And that also led the market to dip. So in terms of that, you know, in Chong, what happened there? Like, what happened to the market? And was that actually the time for me to go all in with my savings?

**Chua Inn Chong** (1:13)
Okay. I think last week, the market will always have catalysts. So there are a few catalysts.
It probably like AI companies, some people feel that it's overvalued. So there's some profit-taking and also Iran, US war, maybe people feel that the war might not end so soon. And also the job market has reported robust. So means that rate cut might not be so early. So therefore, because of this, it might be a catalyst that caused the market to dip. And to answer a question whether to go all in, I think it depends on the investor whether is that in their plan. But for me, my case, I wouldn't go all in. So they should always focus on their long-term plan, their goals, their risk asset allocation, so on and so forth.

**Arpit Agal** (2:02)
Ah, okay.

**Sue-Ann Tan** (2:03)
So they shouldn't react impulsively, right? Okay, because Arpit, I mean, I actually have heard people, you know, I think last Monday, right, when it dipped and then even the STI opened and it was like lower and people were like, okay, now's the time, now's the time. So what do you think?

**Arpit Agal** (2:16)
No, I think that's a great point and going back to Chua Inn Chong point around staying invested in the market.
What we saw last week was another example of a lot of news about geopolitical uncertainty, Iran war, some job report. And one thing, especially as a young investor, you need to realize there's always been noise in the market. As long as you are staying committed to your long-term plan, staying invested and letting the compounding do the work, you're good.

**Sue-Ann Tan** (2:43)
Okay. Well, people always say, buy the dip, right? Like, what does that mean, actually?

**Arpit Agal** (2:48)
I mean, buying the dip is a pretty old concept in a way. I mean, Warren Buffett was one of the initial LCA person who coined this term. And I mean, he was someone who will keep the cash and wait for the right opportunities to park that cash.
But honestly, over time, it has been misused in a lot of places. When people talk about buying the dip, they end up confusing with, you know, timing the markets and always hoping for the right entry point, which to me is a bit difficult to replicate.

**Sue-Ann Tan** (3:18)
So what is the difference between what Warren Buffett says about, you know, buying the dip versus, like, for example, young people saying that, oh, this is about timing the market, you know, like, I'm just keeping everything until the market dips and then I go in.

**Chua Inn Chong** (3:29)
Okay, I think the difference is that Warren Buffett, he will assess the fundamental of the asset before going in. But because of the risk, all these years, all the events that leads to a market dip, investor always buy the dip, right? So it becomes an automatic response that when they buy a dip, it will definitely go up. So they didn't really go access the fundamental and they just buy it. So that's the difference because Warren Buffett will actually assess the fundamentals.