During the recent stock market correction, I decided to buy the dip. But this time, I didn’t just buy my usual dip-buying amount of $25,000 to $100,000. I went much bigger. All told, I spent over $1 million buying the S&P 500 and various tech stocks like Meta, Microsoft, and Amazon.
Spending over $1 million buying stocks was the most I had ever invested in a 50-day period. The last time I came close to this level of stock market investment was in late 2017 when I invested about $600,000 in stocks. Back then, I had just sold my largest rental property in San Francisco and walked away with about $1,780,000 after taxes and fees.
This time, the stock market had already started dipping when I experienced another liquidity event, forcing a tough decision on how to reinvest the proceeds. The process was harrowing and stressful, especially since the original investment had been stable for so many years.
However, to outperform the masses, you must take risks. I want to share the psychological journey of investing a large sum during uncertain times—and how you can overcome your own fear of buying the dip. Let me show you how.
Why Buying The Dip Is So Hard
I’m actually not afraid of buying the dip. I’ve been doing so since 1997, when I saw my puny stock portfolio decline during the Asian Financial Crisis.
What I fear, though, is buying the dip with a lot more money than I’m used to investing. If I have a lot more money to invest, it usually means I’m already losing a lot of money in my existing stock portfolio.
Although stocks have historically provided an average annual return of around 10%, there are plenty of times when they correct by 20% or more. Just in March 2020, the S&P 500 corrected by 32%.
The worst stock market correction in our lifetime was the 2008-2009 Global Financial Crisis, where the S&P 500 corrected by about 50%. That event was so severe it made me question whether I wanted to stay in finance for the rest of my life.
Given the volatility of stocks, I’ve always tried to dollar-cost average more aggressively during downturns. DCAing is fundamental to dip buying. But when you’re already losing a boatload of money from your existing stock portfolio, it can be terrifying to invest even more of your safe cash.
How To Overcome Your Fear Of Buying The Stock Market Dip
If you’re afraid of buying the dip, you’re not alone. Here are the steps I took to overcome that fear—they might help you too. For context, I’ve been buying market dips with income ever since I landed my first job on Wall Street in 1999. Over the years, there have been plenty of corrections, and each one has felt terrible in the moment.
It’s also important to recognize the difference between buying the dip with regular income or cash flow and buying the dip after a major liquidity event—like when a private real estate investment pays out. Reinvesting a large lump sum can be much harder, especially when the original capital performed well. The psychological pressure not to “mess it up” can be intense.
But if you want to build outsized wealth, you must take more calculated risks. Otherwise, you’ll end up like everybody else, or worse. Let’s get started.
1) Give Some of Your Money To Your Family First
Spread luck when it comes your way. The more people around you who benefit, the better. And if you ever find yourself down on your luck, maybe those you’ve helped will return the favor.
After a liquidity event, I transferred $50,000 to my wife’s checking account and $25,000 each to my two kids’ custodial investment accounts, Roth IRAs, and 529 plans. While it’s all part of the same family pot, I took comfort in knowing that if I made poor investment decisions with the remaining funds, at least $100,000 I spread the winnings to the three people I care about the most.
My wife, who’s more risk-averse, invested in a mix of stocks and Treasury bonds. For my kids, I kept things simple with vanilla S&P 500 ETFs and target-date funds.
By redistributing money to my loved ones first, I felt a deeper sense of security and purpose. It was similar to the idea of paying yourself first—saving and investing a portion of your income before spending—but viewed through the lens of long-term family planning.
Although my own portfolios were getting hammered by the correction, the least I could do was protect my children’s. So I bought the dip in both their custodial accounts. Their portfolios were small enough that every correction could be countered with cash infusions. Psychologically, this gave me the courage to keep investing.
2) Do Something Responsible With the Money Before Investing
In addition redistributing your money to your family, consider using some of it for responsible financial moves before diving into the market.
- Pay down debt: Start with high-interest debt, then work your way down.
- Fix what’s broken: Use the money for essential repairs—whether it’s a leaking roof, a failing water heater, or a necessary car repair.
- Invest in your health: Consider spending on things that improve your well-being, like exercise classes, ergonomic work setups, or better nutrition.
For me, I allocated some of my money toward fixing my hot tub. Then I spent $1,025 replacing my car’s heater manifold, which cracked. Knowing I had put my money to good use in other ways made it easier to stomach potential investment losses.
3) Write Out Your Investment Game Plan and Follow It
When investing a significant amount of money, it’s crucial to establish an investment game plan. This plan acts as a guiding framework to help you stay disciplined when the stock market is falling apart.
Your plan should outline your target asset allocation, investment time horizon, and a set range for each dip purchase. Additionally, assess whether the market is experiencing a correction (-5% to -19.9%) or if it’s likely to enter a bear market with a decline of 20% or more. I
f you believe it’s just a correction, you can be more aggressive with your dip buying. However, if you anticipate a bear market, be more patient and spread out your purchases to avoid depleting your cash reserves too quickly. Having cash is vital for maintaining enough confidence to invest in a downturn.
After securing my loved ones and handling necessary expenses, I outlined my investment plan. Not only did I write it down, but I also published it in my post, A Simple Three-Step Process To Investing A Lot Of Money Wisely. The three hours I spent writing and editing the article forced me to think deeply for my situation and for readers who face a similar situation.
Once I had my strategy in place, I methodically deployed capital, buying the dip every day the market declined. When I hit my initial allocation limit for the day or week, I reassessed.
You don’t need to follow your investment game plan perfectly, but having one will help you stay on track. One of the most common mistakes I see is when people lose discipline and buy too much stock too early. You must always have enough cash to take advantage of deeper corrections.
Moved to My Next Investment: Real Estate
After finishing my seven-figure investment in various stocks, I shifted my focus to residential commercial real estate.
I saw the biggest valuation discrepancy between the S&P 500 and commercial real estate, so I started dollar-cost averaging into Fundrise, which is possible due to its$10 minimum. I believe the current oversupply in residential commercial real estate will be absorbed by the end of 2025, leading to upward pressure on rents and property prices in 2026 and beyond.
Despite my preference for value investing, I didn’t allocate as much capital to real estate as I did to stocks. Real estate moves at a much slower pace than stocks—anywhere from 3x to 8x longer in my estimate. While stock prices can correct and recover within weeks, real estate cycles often take years.
This difference in timing influenced my investment strategy: I felt a greater sense of urgency with stocks, which could rebound quickly. Whereas I could afford to be more patient with real estate. In other words, the stock market correction created more investing FOMO and I didn’t want to miss out.
4) Adopt the “Go Broke” Mentality To Conquer Your Fear
One of the biggest mental hurdles in buying the dip is the fear that the market will keep dipping. Many people wait for confirmation that the worst is over—but by then, much of the rebound may have already happened.
That’s why I embrace a different mindset: I kiss my money goodbye the moment I invest it.
Instead of viewing the money as mine, I see it as my contribution to the financial future of my wife and kids. The money is now in the hands of the stock market or real estate market gods to do their thing. Will they punish me or reward me? I hope the latter as my goal is to take care of my family.
Of course, losses still sting. But by shifting my perspective, I reduce the emotional weight of each downturn. The less personal the money feels, the easier it is to invest.
And let’s be real: it’s much easier to invest $10,000 than $1 million. With larger sums, one wrong move can set you back years. Having the right stock exposure is key. That’s why every dip you buy can actually help you feel more at ease — you have less money left over to put to work, reducing the pressure of future decisions.
After all, when you’re broke, there’s only upside!
Remember, scared money doesn’t make money. This saying comes from my time playing poker. Whenever I feel hesitant about going all-in, I calculate the odds, and if they’re in my favor, I press.
5) Extend Your Investment Time Horizon To At Least 10 Years
I don’t know anybody in the history of dip buying who has hung on and lost money. Well, except for those who got margin called. If you can extend your investment time horizon to at least 10 years, you likely have a 95%+ chance of making money. Stretch it to 20 years, and your odds rise to 99.9% based on historical returns.
If you have young children, they can be the easiest motivation to buy the dip. Imagine your kids in their 20s or 30s, talking stocks, real estate, and other investments. If you could travel to that future moment, you’d probably bet everything you have today to secure their financial future.
Before I had kids, I was less aggressive buying the dips. I already had enough money to be satisfied, which is why I left work in the first place.
But now, it’s much easier because my kids’ investment accounts are smaller, and every dip is a buying opportunity for them. Besides, if I want to help them become financially independent by 25, they/we need to be more aggressive. The robots are coming!
6) Expect to Lose — It’s the Price of Investing
Finally, the worst thing you can do when buying the dip is assume you can’t lose. Anyone who has ever invested in the stock market or taken outsized risks has lost money before—and you will too. Losses are inevitable.
Even if you’re holding pocket Aces pre-flop in a heads-up game of Texas No-Limit Hold’em, you’ll still lose about 15% of the time. The same goes for investing. That’s why it’s crucial to calculate your potential downside before deploying capital during a dip.
For example, if you invest $100,000 after a 10% correction, understand that corrections can sometimes turn into bear markets. A further 25% drop from your entry point would mean a total 35% drawdown—translating into a $25,000 paper loss.
If you prepare for this possibility ahead of time, the pain may sting less if it actually happens. Plus, you’ll be in a better position emotionally and financially to invest more at even lower prices.
Timing The Market Is Tough, Stay Humble
Still think you can time the market? Just look at Mike Wilson, Chief Investment Officer of Morgan Stanley. He was bearish throughout 2023 and 2024, and the S&P 500 posted back-to-back gains of 20%+.
On April 7, 2025, after the S&P 500 had already corrected to 5,000, he predicted another 7%–8% drop to 4,700. Doom was on the horizon! Then, barely a month later on May 12, he appeared on CNBC with bullish conviction, claiming his 6,500 target would be fulfilled. Incredible. Being a Wall Street strategist or economist must be the best job—you can be wrong repeatedly and still get paid handsomely.
But this just goes to show how difficult it is to time the markets correctly. Just when you think you can’t lose, you might lose a boatload. And just when it feels like the sky is darkest, the soft glow of the sun begins to rise. Stay humble.
I fully expect to experience losses from my new investments again. Case in point: I bought ~$50,000 of Nike (NKE) stock between $68–$73 per share earlier in 2025, thinking it was a compelling turnaround story. The stock was at a five-year low, a new CEO was in place, and valuations seemed reasonable. Wrong! Nike cratered to $53 just two months later—a ~30% drop—partly due to the imposition of new tariffs.
Don’t Run Out of Cash – Cardinal Rule Of Dip-Buying
One of the toughest parts of buying the dip is running out of cash. It’s a form of psychological warfare because you need to accept that your existing investments are losing value while also watching your liquidity shrink with each stock purchase.
When you finally run out of cash, it’s like running out of ammunition while being surrounded by zombies. You’re vulnerable, exposed, and unable to defend yourself financially. Living paycheck-to-paycheck will snuff out your courage to invest.
That’s why it’s essential to stay disciplined in how much you buy with each dip. Your emotions may run rampant.
You Will Feel Stressed, Show Yourself Grace
The entire process of buying the dip for six weeks was stressful, especially since part of the time I was up in Lake Tahoe trying to get some ski runs in with my family on vacation. But I stuck to my investment game plan and cadence, trusting that my approach would pay off in the long run.
If you’re the partner who doesn’t manage the household finances, take a moment to acknowledge the effort of the partner who does. Managing your family’s finances can often feel like a full-time job, especially during market downturns when the pressure to make the right decisions intensifies. A little appreciation can go a long way in supporting the person carrying that weight.
There were plenty of moments when my mood soured as the stock market kept dropping with each new aggressive government policy initiative. However, I did my best to shield my family from the stress I was feeling.
When buying the dip and the market keeps dipping, it’s crucial to remind yourself that you’re trying your best. Nobody can time the market perfectly, but taking action and making thoughtful decisions already puts you ahead of those who sit on the sidelines.
Another Market Correction Is Inevitable
Whether it’s a 10% pullback or a 50% crash, nobody can predict it with certainty. However, given the strong historical track record of buying the dip, it’s a good idea to always have some idle cash ready to deploy the next time it happens.
So the next time a market decline shakes your confidence, remember:
- Secure your loved ones first.
- Make responsible financial moves before investing.
- Write out your investment plan and stick to it.
- Embrace the “go broke” mentality where every dollar you invest is no longer yours.
- Extend your investment horizon.
- Accept that you will lose money, at least, temporarily as you won’t be able to time the bottom.
And most importantly—don’t run out of cash.
Because when the dip comes, you want to be ready to take advantage, while non-personal finance run for the hills. The only way to build outsized wealth is to take more calculated risks. Best of luck with your investment decisions!
Reader Questions and Suggestions
Do you regularly buy the dip? If so, how do you decide how much to invest during a downturn? How do you handle the fear of putting significantly more money to work while watching your existing portfolio decline?
Minimize Investment Volatility With Real Estate
Stock market volatility is a price you pas as an equities investor. If you want to dampen the volatility, diversify into real estate. Real estate is a more stable asset class that generates income and provides utility.
Check out Fundrise, my favorite private real estate investment platform open to all investors. With an investment minimum of only $10, it’s easy to diversify into real estate and earn more passive income.
The real estate platform invests primarily in residential and industrial properties in the Sunbelt, where valuations are cheaper and yields are higher. The spreading out of America is a long-term demographic trend. For most people, investing in a diversified fund is the way to go.
I’ve invested ~$1,000,000 in private real estate so far, with over $300,000 in Fundrise, a long-time sponsor. My goal is to diversify my expensive SF real estate holdings and earn more 100% passive income. I plan to continue dollar-cost investing into private real estate for the next decade.
About Financial Samurai
Founded in 2009, Financial Samurai is the leading independently-owned personal finance site today with about 1 million pageviews a month. Every article is grounded in firsthand experience and real-world knowledge.
I worked in the equities department of Goldman Sachs and Credit Suisse for 13 years before retiring from banking in 2012 at age 34. I’m also the author of the new book, Millionaire Milestones: Simple Steps To Seven Figures.
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