Buying stocks on the dip can be a way to lock in a good price for an investment, which helps to maximize your returns. This year, unfortunately, amid the bear market, that hasn't played out all that well for investors as stocks have continued to fall in value as the year has gone on.
Another challenge is that with many stocks struggling, investors have too many investments they could potentially choose from in an effort to "buy the dip." A new exchange-traded fund (ETF) could help with that – the BTD Capital Fund (NYSE American:DIP). It's an actively managed fund and so it isn't a cheap one; the ETF's gross expense ratio is 1.29%. The fund uses artificial intelligence and it looks to "capitalize on quick-return opportunities in the market." It considers more than 25 metrics in its trading decisions and says it "can identify authentic dips in nanoseconds."
Since the ETF is new and has launched just last week, it'll take time for it to prove itself to investors. With other ETFs, you might be investing in a certain sector of the economy or are focused on a theme or industry that you believe has solid growth prospects. With the BTD Capital Fund, you're effectively betting on how good the fund's AI is, which at this point is unproven. That can make the ETF a bit risky as it currently only contains 24 holdings. The top three stocks in the fund as of Dec. 15 were CF Industries Holdings (NYSE:CF), Delta Air Lines (NYSE:DAL), and Tesla (NASDAQ:TSLA).
