I Have 30 Years to Invest: Are Market Dips Actually a Blessing for My Cost Basis?

If you’re a young investor who’s got 30 years to invest, the latest Trump tariff-driven market correction may present more of an opportunity (maybe even a blessing), provided you can think clearly through the mist of uncertainty and the crowds of panicked investors who may sell when they should buy.

Of course, it’s never easy to tell what lies ahead. All of these bottom timers are bound to get it wrong. And while one could undoubtedly lose money over the near-term by picking up shares after a 10% drawdown if we’re destined for a 20% bearish implosion (or worse), those with multi-decade time horizons have more than enough time to recover.

Arguably, someone who’s young should hope that stocks keep moving south so that they can lower the cost bases of their positions. Indeed, a market dip may not seem like a “blessing” today, but when the current inflationary, tariff-fueled climate is eventually behind us, the seemingly damaged goods you picked up on weakness may start to look like a steal. Personally, I think a long-term time horizon is a massive advantage that older investors (think retirees) may lack. If you’ve got time on your side, you can recover from those nasty market dips.

Corrections can be a good thing for super long-term investors.

Of course, the latest plunge in stocks feels a heck of a lot worse than a correction (can you believe the S&P 500 is down by just over 8%?), likely because of all the big bank S&P 500 year-end price target downgrades and the catastrophizing about bad things that can get on tariffs. Indeed, if worse comes to worst, stocks could certainly have more room to fall. But it’s those younger investors, with multi-decade time horizons, that can hold on and stay standing as others around them fall.

This Reddit user, who recently posted on the r/Bogleheads subreddit (it’s full of hands-off passive investors), has it spot on. They’re treating this dip as an opportunity to buy. In fact, he’s “hoping” the stock market doesn’t recover so soon so that their next paycheck can be invested at today’s post-correction prices. Though the Reddit user’s mindset is in the right spot, I do think that it was a mistake not to have any liquidity. A market correction is only an opportunity for those who have cash to buy stocks. Only time will tell where stocks go from here. But if a V-shaped bounce is in the cards, there’s a chance the young contrarian may not have as much time to seize the best of deals.

The 2020 stock market crash did not give investors much time to buy. Not only did you need cash on hand in February and March of 2020, but you also needed to deploy it when in a state of shock. Indeed, the COVID crash of 2020 saw one of the fastest rebounds on record. And while the first quarter correction of 2025 may drag its feet through the year (2018 was a bad year for stocks, wobbled by tariff-driven corrections), I think those looking out to 2055 don’t need to make too much of the uncertainties in 2025.

A long-term horizon doesn’t make it okay to take on excessive risks.

Just because someone has a 30-year horizon, though, doesn’t mean one can recover from all types of crashes. Indeed, if you’re too heavy in a speculative hyper-growth stock or cryptocurrency, you could be at risk of losing most of your investment in those “irrecoverable” crashes. Indeed, a high-multiple stock could crumble by more than 80%, leading to many lost decades. As a young investor, one should avoid taking such extreme risks with too big a chunk of their portfolio, especially if we’re talking about funds within a tax-advantaged account. 

Either way, more young investors need to hope for dips so they can average into stocks at better prices. At the end of the day, it’s far better for young people to have markets crash or correct rather than have stocks flatline for a decade, or worse, keep surging higher towards a bubble that’ll end in an epic implosion.

As the dips in the road come along, though, it’s vital to have some cash to put to work. You shouldn’t seek to hoard a ton of cash waiting for a correction, but you should at least have some liquidity. Otherwise, you could walk away with next to nothing once the market mostly heals from its correction.

The post I Have 30 Years to Invest: Are Market Dips Actually a Blessing for My Cost Basis? appeared first on 24/7 Wall St..