[Michelle]

The market seems to be doing really well right now and inevitably will take a dip.

My question is have any of you toyed with the idea of not reinvesting your dividends and holding on to cash to buy the dip? Not

[John]

My exact strategy for the past five years. When I generate too much cash, it’s time to buy something that compliments my portfolio.

It’s simply a balancing act

[JT Doc]

No. Never disrupt the compounding process. Just have dry powder on hand to buy the dip, while also continuing to DCA.

[Prasith]

I would keep around 20% of my contribution as cash reserves, be it any account for that instance, and invest daily the rest (automate Index fund purchase).

When the stock price falls, use cash from the reserve. thats my way. YMMV.

[Brian]

That assumes that when the dip occurs it will dip below where it was when the dividends were paid.

[Mike]

Time in the market > timing the market.
Reinvest the dividend and stop trying to time what cannot be timed.

In 10 years you’ll wish you bought at the 2024 price.

[Scot]

I’ve slowly been reducing my stock contributions to increase cash reserves incase of a downturn.

[Michael]

Yes absolutely. I never reinvest for most stock/etfs/cefs/etns when I know I’ll be able to buy them for 15% to 20% less from August/September to October

[Brian]

Nah I just hold enough cash reserves nowadays earning their 5%, or covering a two year layoff from work.

If the market drops there’s a good chance of being laid off. If not Then I’ll throw it in , and slowly build back up.

[Tomáš]

Time in the market beats timing the market

[Ben]

I don’t really try to time the market with my ETFs in my retirement accounts but what I do in my taxable account is I always take dividends and I buy some stocks in my portfolio or add a new one that I feel are attractive buys.

Most of the time there is always one company I’d like to add to

[Shawn]

It depends on how over or under valued the stock or fund is. Yes it’s something I look at.

I have been cutting back stock purchases and trimming back where it makes sense.

[Amber]

No, there’s an equal chance that the market will take a dip as there is that it will continue to raise for the foreseeable future.

I’d rather not try to time the market…. If/when it does dip, I’ll worry about trying to find and collect as much money to invest as I can during that time.

That’s when I’ll temporarily reduce budgets in other areas, possibly pick up some extra work, sell things I don’t need, probably even cash in my change from the couch cushions lol, etc.

But until then, I see no point in gambling by trying to time a dip that may or may not be coming in time for it to make more than reinvesting all the dividends along the way.

[Sean]

Nope market timing isn’t a good strategy. The market also spends most of its times at or near all time highs.

[Eric]

No. I’ve never considered it. Buying the dip could end up being buying a falling knife.

How do you know when the dip ends? Sounds like market timing which I do t agree with.

Put a wind fall in all at once, if not, then Dollar cost average in.

[Mark]

No. i dont see how that would be mathematically more advantageous.

ur re investing the dividends thus taking more advantage of compound interest.

Your strategy is to disrupt the beauty of compound interest by keeping cash on the side for an undetermined amount of time (3 months,6 months, 1 yr, 18months 2 yrs) and then hope to buy back in at the right time.

Im going to say no thanks tom hanks to this.

[Author]

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