Why buying the dip is so hard — and how to make it automatic

Buying the dip is hard because the market's biggest rebound days usually happen while the selloff still feels dangerous. The problem isn't weak willpower. The market just tends to feel most unsafe right when long-term expected returns are getting better.

Studies · Investor behaviorPublished May 25, 2026DoubleTrends L.L.C.

The cruel arithmetic of the best days

The stock market's single best days don't happen during calm bull runs. They happen in the middle of crashes. Since 2000, all ten of the S&P 500's best single days occurred while the market was already at least 10% below its peak, and eight of the ten while it was more than 20% down. They cluster in 2008, the COVID crash, and the 2025 tariff selloff: right when investors were heading for the exits.

day	daily move	drawdown at the time
2008-10-13	+11.6%	−35.9%
2008-10-28	+10.8%	−39.9%
2008-11-13	+6.9%	−41.8%
2008-11-24	+6.5%	−45.6%
2009-03-10	+6.4%	−54.0%
2009-03-23	+7.1%	−47.4%
2020-03-13	+9.3%	−19.9%
2020-03-24	+9.4%	−27.7%
2020-04-06	+7.0%	−21.3%
2025-04-09	+9.5%	−11.2%

That's the trap. Sell to stop the pain, and you may be on the sidelines for the rebound — because the rebound often starts while the news still looks terrible and the drawdown is not yet resolved.

What missing them costs

Here's $10,000 invested in the S&P 500 from 2000 onward, depending on how many of those best days you were around for:

$51,356 fully invested

Every day in the market. Roughly +414% over the period.

$22,867 miss the best 10 days

+129%. Less than half the full result — from sitting out ten days.

$13,291 miss the best 20 days

+33%. A quarter century of growth, almost all gone.

$8,453 miss the best 30 days

−15%. Thirty days out of more than 6,600 — and you end with a loss.

Miss a handful of the days that come during a panic and decades of compounding can look very different. This is why a dip plan should be made before the dip, when the numbers are easier to respect.

When it's ugly, the odds are actually in your favor

History is pretty blunt here. Since 1950, the S&P 500's average return over the next 12 months was about +9%, and positive 75% of the time. Measured only from days when the market was already 20% below its peak, the average forward year was +13%, and positive 87% of the time. Buying when it hurt has paid better, and more reliably, than buying at all-time highs. It does not mean the market cannot fall further first. It means the long odds favor the buyer, not the seller.

Why you still won't do it

Knowing the data helps less than people expect in the moment. When your portfolio is down 20% and every headline is apocalyptic, instinct screams sell, and “this time is different” feels obviously true. Discipline fails right when it matters most, because the decision stops being analytical and turns into a way to calm your nerves. The fix is not more willpower. It is reducing how much of the decision depends on how you feel that week.

Make it a rule, not a feeling

That is the case for a rules-based signal. A signal doesn't get scared. It doesn't improvise either. It waits for the conditions where past selloffs have exhausted themselves — oversold momentum on two timeframes, inside a market regime classified as panic or bear — and flags the moment the same way every time.

The rule still does not make the decision for you. It does not know your cash needs, tax situation, risk tolerance, or allocation target. What it can do is give you a consistent reference point for reviewing a planned contribution, staged entry, or cash deployment rule at the moment emotion usually takes over.

See exactly what the rule reads → See the long-run S&P 500 drawdown base rates →