Buy-the-Dip: Viable Strategy or Fallacy?

Does fortune favor the bold?

Nicolas Rabener
10 min read
15 Jun 2026

SUMMARY

  • Buying the dip has worked since the GFC
  • However, it represents a poor investment strategy
  • Max drawdowns of -70% were reached historically

INTRODUCTION

The period following the Global Financial Crisis can be characterized as one in which central banks and governments became significantly more active in managing financial markets. Each time equity markets declined meaningfully, policymakers appeared to intervene – through quantitative easing, emergency rate cuts, or fiscal stimulus – to arrest the fall and restore confidence (read Have Stock Markets Changed?).

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