‘Buy the Dip’ Wins Again for Stock Investors

After President Trump unleashed mayhem in financial markets in early April with proposals for steep tariffs on America’s trading partners, Breck Echelberger, a student at Texas A&M, sat up late one night flipping through Reddit.

“America is over,” one post read.

For Mr. Echelberger, 21, this was the moment he had been waiting for. It was time for him to load up on marquee stocks more cheaply.

On April 4, with the stock charts lit up in red, he bought hundreds of shares of companies like Nike, Apple, Costco and a few others that had been on his wish list for months. Mr. Echelberger said it felt “like Christmas.”

By the middle of the following week, the Trump administration had stepped back from its tariff plans, leading to a sharp rise in the stock market. Since hitting its low on April 8, the S&P 500 has climbed more than 25 percent, and it hit a record high late last month.

Mr. Echelberger, who said his investments had doubled in value since April, had followed a simple strategy that has become a mantra among retail investors — “buy the dip.”

“I knew that the market would recover at some point,” he said.

His conviction — and those of other “buy the dip” adherents — isn’t rooted in deep, technical economic analysis. In fact, it contrasts with the consumer sentiment surveys that have painted a public that feels gloomy about the economy. Instead, it is based more on an expectation that the market will rise again, simply because it always has before.