This video details the speaker's five-year experience of buying stocks "on the dip," offering real-life examples of successful and unsuccessful investments. The speaker shares their investment strategy, focusing on dividend-paying stocks, and discusses their current biggest investment.
Successful "Dip" Buys: The speaker successfully bought several stocks at a low point, including Oshkosh Corporation (industrial equipment), Huntington Ingalls Industries (shipbuilding), Altria (tobacco), and Norfolk Southern (railroads), all resulting in significant profits. The speaker emphasizes the importance of understanding the company's business model and fundamentals before investing.
Unsuccessful "Dip" Buy: United Parcel Service (UPS) is presented as an example where buying the dip didn't pay off. The speaker attributes this to changing business conditions, such as Amazon reducing its reliance on UPS and Walmart's similar in-house logistics strategies. The speaker highlights the importance of assessing whether the underlying investment thesis remains valid.
Importance of Patience: The speaker stresses patience as crucial to the success of a "buy the dip" strategy. The speaker acknowledges that the bottom of a market dip is unpredictable, and they may not always perfectly time the lowest price. The speaker states that a long-term approach (holding for at least 10 years) is ideal for this strategy.
Focusing on Quality: The speaker's strategy focuses on high-quality dividend-paying companies with a proven track record. The speaker explains they are now shifting their portfolio away from cyclical stocks to focus on stable, consistently growing dividend-paying companies.
Risk Tolerance and Portfolio Diversification: The speaker reveals a significant portion (33%) of their IRA is invested in UnitedHealth Group, illustrating a high-risk tolerance and concentrated portfolio approach. They openly acknowledge the potential downsides of such a strategy.
