How to Invest When the Stock Market Falls

Buying into stock market weakness often makes sense, but it is not easy and can sometimes be the wrong thing to do

Tanguy De Lauzon 26 November, 2018 | 9:54AM
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“Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down”

Warren Buffett, 2008

Say an investor buys an asset today and it falls by 40% tomorrow. Should you buy more of it? All else being equal, you would be crazy not to buy more as long as your conviction remains. Yet, the process of ‘buying in the dips’ is beset with behavioural challenges and something every investor must consider carefully.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Tanguy De Lauzon  is Head of Capital Markets & Asset Allocation for Morningstar Investment Management EMEA