Buying the Dip?

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If you liked it at a dollar, should you love it at 10 cents?

Warren Buffet is thought to have made his fortune of 80 billion dollars by one principle: Buy Good Companies, at low prices, during Bear Markets, and hold them forever.
It founds simple enough, but how you make money?
Well he also bought income producing companies, which pay dividends.
Once again, it seems that the devil is in the details.

😂🤣😂

Buy Brand Name Dividend paying assets, when prices are low.

While any book on Mr Buffet will cover his growth and evolution as a trader and investor, they all have a point when he changed his strategy to buying big brand name companies with dividend meaning income during market dips and it is during this stage in his evolution that he experienced his greatest exponential gains and he became a living legendary.

However, Buying the Dip is also like catching a falling knife.

It is not always painless.
‘It is not always easy
You don’t always catch the handle
You may catch the tip

source

How far do you let the knife fall before catching it?
Which is of course a metaphor for falling stocks, and knowing when to buy, and when to wait.
If you buy to soon, you lose money if the stock continues falling.
While if you buy to late, you will miss out on buying the stock at its cheapest price, and getting the largest gains.
While Warren Buffet was historically been good at calling the bottom, he says most investors don’t have enough time in the market to accurately buy at the bottom.
Some think this is arrogance, but it simply means he has 60 years of experience and the rest of us, don’t.

🧐🧐🧐

So what does he recommend ?

Buying small chunks on a regular basis or better yet regular investments in an index fund.

Small Chunks on a regular basis… sounds like Dollar Cost Averaging

Yep, dollar cost averaging buying small amounts on a regular basis of a good company has been proven by multiple financial studies to be the safest and most effective, meaning profitable, way to invest.
So in a bear market, I interpret this as buying small chunks on the dips, all the way down, and not trying to guess the bottom.
This avoids buying to early and buying to late.
This means we miss out on both the largest gains and the largest losses, but still make money.
And I am okay with that.

So are their brand name cryptos that pay dividends?

In my opinion…

The brand names in crypto are found in various ways.
Lists of the top 100 by MarketCap are where many start.
But if you follow that you would have bought into Terra Luna and FTX, and we all know how that turned out.
I prefer to buy crypto that’s been around a while, has a strong community, I understand how it works, and I can figure out how to earn money with it, while I hold it.
I think Time in the Market is important.
If a crypto has survived a bear market or two or three, you know it will likely be still here when this one is over.
And if it’s price recovered in the past, it probably will do it again.
Some very rich and very smart people lose money investing in the latest and greatest, so your best bet is to stick with the stuff which has weathered the storms. IMHO
Finding the crypto version of dividend paying brand name stocks takes some research, but your hard earned money deserves this time.

This is my journey through the Cryptoverse, follow me at your own risk.

It’s not a journey for everyone, but I have chosen this path, it’s full of lions and tigers and bears. I may get eaten.

Shortsegments is a writer on Leofinance.io, a social media platform for memes, short form content, long form content, video blogs, and other content focused on cryptocurrency, the blockchain, non-fungible digital tokens or NFTs, and decentralized finance.