Here’s the Smartest Place to Put Your Money When the Stock Market Dips

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

[[{“value”:”Image source: Getty Images
The U.S. stock market is down over 8% year to date, as measured by the S&P 500 Index. On Thursday alone, the index sank 4.84% — its biggest daily loss since 2020.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Investors are worried and wondering how to protect their money. You might be thinking about moving your money to a safe haven, like Treasuries or certificates of deposit.But when the stock market is down, the best place to put your money is — stay with me now — the stock market.Let me show you why stock market dips are big opportunities for investors, as well as a smart and simple way to invest now.Downturns are the best time to buyStock market downturns are scary. I’ve seen my retirement portfolio drop by five figures this year, and that’s gut-wrenching.But I’m not panicking, and there are two reasons why:The U.S. stock market has always recovered from downturns and gone on to reach new highs.When stocks lose value, they basically go on sale. You can buy shares for less money.As an example, let’s go back to early 2020, when the S&P 500 dropped by 33% in about a month due to the COVID-19 pandemic. Since its March 2020 low point, the index has gained 141% — even after this year’s losses.That means investors who bought stocks at those lows have more than doubled their money.A smart and easy way to buy stocks on the dipYou don’t have to be an expert stock-picker to profit from the stock market. There’s a simple strategy that could earn you high returns and save you a fortune in taxes.1. Open an IRAAn individual retirement account (IRA) is a tax-advantaged retirement savings account that’s available to anyone who earns income.You can put up to $7,000 in an IRA each year (or $8,000 if you’re 50 or older), and then you can invest the money in stocks, funds, bonds, and more. You can also deduct your contributions from that year’s taxable income, which means you get an upfront tax break.The best part? The investments in your IRA are not subject to capital gains tax or dividend tax. So when you sell stocks that have gained value, or get a dividend payment, the IRS can’t take a share of your earnings.Tax rates vary from person to person, but in my case, these tax breaks could save me six figures in retirement.The only caveat is that you need to leave your money in the account until age 59 1/2. If you withdraw money before then, you’ll pay a 10% penalty (with some exceptions).Opening an IRA is easy. To get started, check out our list of the best IRA brokers and open a new account. Your broker will walk you through how to open an IRA. You’ll probably be done in minutes.Once your IRA is open, it’s time to start investing. Here’s a good way to start.2. Buy an S&P 500 index fundThe S&P 500 Index represents over half the U.S. stock market by value. It’s made up of 500 big, successful companies, and since 1957 it has gained an average of 10% per year.You can buy a share in the whole index with one quick purchase of an S&P 500 index fund.S&P 500 index funds invest in all the companies within the S&P 500, so they mirror the index’s performance. They charge a very low fee to do the work for you.You can buy an S&P 500 index fund through your IRA broker. And just like that, you’ll have a diversified stock portfolio.That doesn’t mean an S&P 500 index fund should be your entire portfolio. You may want to diversify with investments like real estate, international stocks, or low-risk assets like bonds. But an S&P 500 index fund is one of the best ways to start profiting from the stock market’s growth.Check out our list of the best stock brokers to open an account today.Don’t believe me? Take it from Warren BuffettWarren Buffett, legendary investor and one of the richest people on Earth, is a big fan of buying stocks when the market is down. In his words: “Be fearful when others are greedy. Be greedy when others are fearful.”In other words, when people are panicking and selling stocks, it’s probably a good time to buy.Buffett has also said that ordinary investors would do well to invest 90% of their portfolios in a low-fee S&P 500 index fund and the other 10% in government bonds.And if it’s good enough for Buffett, it’s good enough for me.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.James McClenathen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

The U.S. stock market is down over 8% year to date, as measured by the S&P 500 Index. On Thursday alone, the index sank 4.84% — its biggest daily loss since 2020.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Investors are worried and wondering how to protect their money. You might be thinking about moving your money to a safe haven, like Treasuries or certificates of deposit.

But when the stock market is down, the best place to put your money is — stay with me now — the stock market.

Let me show you why stock market dips are big opportunities for investors, as well as a smart and simple way to invest now.

Downturns are the best time to buy

Stock market downturns are scary. I’ve seen my retirement portfolio drop by five figures this year, and that’s gut-wrenching.

But I’m not panicking, and there are two reasons why:

• The U.S. stock market has always recovered from downturns and gone on to reach new highs.
• When stocks lose value, they basically go on sale. You can buy shares for less money.

As an example, let’s go back to early 2020, when the S&P 500 dropped by 33% in about a month due to the COVID-19 pandemic. Since its March 2020 low point, the index has gained 141% — even after this year’s losses.

That means investors who bought stocks at those lows have more than doubled their money.

A smart and easy way to buy stocks on the dip

You don’t have to be an expert stock-picker to profit from the stock market. There’s a simple strategy that could earn you high returns and save you a fortune in taxes.

1. Open an IRA

An individual retirement account (IRA) is a tax-advantaged retirement savings account that’s available to anyone who earns income.

You can put up to $7,000 in an IRA each year (or $8,000 if you’re 50 or older), and then you can invest the money in stocks, funds, bonds, and more. You can also deduct your contributions from that year’s taxable income, which means you get an upfront tax break.

The best part? The investments in your IRA are not subject to capital gains tax or dividend tax. So when you sell stocks that have gained value, or get a dividend payment, the IRS can’t take a share of your earnings.

Tax rates vary from person to person, but in my case, these tax breaks could save me six figures in retirement.

The only caveat is that you need to leave your money in the account until age 59 1/2. If you withdraw money before then, you’ll pay a 10% penalty (with some exceptions).

Once your IRA is open, it’s time to start investing. Here’s a good way to start.

2. Buy an S&P 500 index fund

The S&P 500 Index represents over half the U.S. stock market by value. It’s made up of 500 big, successful companies, and since 1957 it has gained an average of 10% per year.

You can buy a share in the whole index with one quick purchase of an S&P 500 index fund.

S&P 500 index funds invest in all the companies within the S&P 500, so they mirror the index’s performance. They charge a very low fee to do the work for you.

You can buy an S&P 500 index fund through your IRA broker. And just like that, you’ll have a diversified stock portfolio.

That doesn’t mean an S&P 500 index fund should be your entire portfolio. You may want to diversify with investments like real estate, international stocks, or low-risk assets like bonds. But an S&P 500 index fund is one of the best ways to start profiting from the stock market’s growth.

Check out our list of the best stock brokers to open an account today.

Don’t believe me? Take it from Warren Buffett

Warren Buffett, legendary investor and one of the richest people on Earth, is a big fan of buying stocks when the market is down. In his words: “Be fearful when others are greedy. Be greedy when others are fearful.”

In other words, when people are panicking and selling stocks, it’s probably a good time to buy.

Buffett has also said that ordinary investors would do well to invest 90% of their portfolios in a low-fee S&P 500 index fund and the other 10% in government bonds.

And if it’s good enough for Buffett, it’s good enough for me.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.James McClenathen has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

“}]] Read More