Buying S&P 500 dips: long-term returns and the risks investors face

The article argues that buying S&P 500 dips has historically been a strong long-term strategy, with the index up more than 13,000% since 1980 and recently reaching new highs. It highlights that disciplined investors who buy during pullbacks can benefit from the market’s long-term upward trend, especially in secular bull markets. However, the piece emphasizes the risks: sharp drawdowns, poor market timing, and the psychological difficulty of holding through volatility. It cites the S&P 500’s 20% decline in 2022 as an example of the pain dip-buyers may endure before recovery. The article also notes recent inflows into U.S. equity funds as investors bought the dip amid chip-related optimism, reinforcing that the strategy can work when investors stay patient and avoid panic selling.