Hold the Dip

AQR

Research

22 Pages

AQR examines whether the popular buy the dip mantra actually beats a simple buy and hold approach over many decades. The authors test systematic versions of the strategy and find that repeatedly buying pullbacks while holding cash in between tends to lag, largely because it fights price momentum rather than going with it.

Date published: December 1, 2025

As of December 1, 2025.

Key Takeaways

Buy the dip defined: Describes systematic rules that add equity risk after price declines while parking in cash during calm periods.
Structural headwind explained: Shows that buy the dip usually bets on short term reversals in markets that often exhibit persistent trends.
Trend based alternative: Argues that timing attempts work better when they align with momentum signals instead of repeatedly fading them.
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