The phrase "buy the dips" is one that is often heard on Wall Street or in stock market. It means purchasing an asset after it has dropped in price. The belief here is that the new lower price represents a bargain as the "dip" is only a short-term blip and the asset, with time, is likely to bounce back and increase in value.There are many reasons why buying assets when they are dropping in price can be a wise decision. First of all, when an asset falls in price, it may present a buying opportunity for investors who believe that the dip is only temporary and that the asset will eventually rebound to its previous level or even higher. In addition, when prices fall across an entire sector or market, it can often mean good news for investors who believe that values have become depressed unfairly and are now undervalued. Finally, by buying assets during times of market volatility or decline, investors can reduce their overall risk exposure since they are buying into assets at lower prices than they were before.While there are certainly risks associated with investing during times of market volatility or decline (such as possible further drops in prices), there are also opportunities to be had by those who have done their homework and understand what they're investing in market.
