Buying in when the market is low

Hi all!

I do not plan to time the market. I am happy to invest monthly. However, suppose approximately 80% of your portfolio is stocks and 20% is cash.

How much does the price of an index fund (or a stock) have to drop before you go all in with your spare cash?

That is, suppose you continue to invest monthly as usual, but plan to invest a larger chunk if the market drops. How far does the price have to drop for you to invest a larger chunk?

I understand everyone is different, but I would like to hear some answers along the lines of:

“If the market price dropped by 30%, I would invest 40% of my cash, if it dropped by 50%, I would invest all remaining cash”.

Thanks in advance!

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What time period are you talking about?

I trickle money into ETFs so that I buy the highs and lows due to the difficulty in timing the market.

That being said, say the VWRL drops by 5% in a week, I usually purchase 2-3 shares. That is a significant investment for me. I invest ~£550 per month and have a portfolio of ~£13,000.

So 2-3 shares would be ~£240 aka half my monthly investment budget.

I usually identify stocks across the course of the month to invest in on payday. I hold 1% of my portfolio in cash.


I am investing for the long term, and I am at the beginning of that journey.

I also invest monthly but take the S&P 500 as an example. Suppose you invest monthly but have some cash available (perhaps 10-20% of your portfolio).

How much does the value of a share have to decrease by before you add more than just your monthly investment?

If it does not change much, I can just add my monthly investment. But if it drops by 10-20% should I use all my cash savings to buy at this point? Or should I perhaps use 40% of my cash savings? If it drops by 50% do I put all my cash in at this point?

If you assume that you have no knowledge of the market and that the market always trends upwards over a long enough time period, then the best time to invest based on that knowledge is immediately.

That’s what I do personally if I have money to invest and it makes sense.


I’m assuming that £20k spare cash is not an emergency fund and if so that is a large amount of uninvested money. The opportunity cost is far too high.

With that being said I would invest £250 daily for a 5% drop of my globally diversified portfolio until the market rebounds. If it does not rebound in this time happy days :grin:

For a correction in the market (10% drop) i would invest £10k lump sum then £250 daily till the market rebounds. Then same as above.

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If you’re going to keep 20% in cash then your portfolio will have to return 25% higher returns than investing all 100%.

For this to be a strategy you’d need to be confident of a drop of 25% and to feel confident to buy should this happen. This is fairly unlikely if you’ve got a diverse portfolio.

I would look instead, as others have, to dollar cost average and providing you have the a 5+ year time horizon you’re like to be fine.