@BaluBalu : I believe you came up with a new meaning for the word (DIPLET) ! Sorry I couldn't resist. <2021 has been a year of buy the diplets (not dips).

Probably as many definitions of BTD as there are investors. Generally, it means, using weakness in an investment to lower your average price in a position.
Right or wrong, for me specifically, YMMV:
Anything short of the following moves down is market noise and/or the market breathing.
On the S&P, a worthy dip is one in which the price drops to the bottom of its trading channel (if it has one) or its 50 dma, usually in the range of a 5%-10% move, while
On an indv stock, it could be a much smaller move of a coupla %.
A 10% move down is not a dip, it is a correction.
A 20% move down is not a dip, it is a bear market.
Words of course matter, and any discussion about this topic is likely the get bogged down/become meaningless until/unless discussion participants accept/understand what the other poster means by a dip.
PLEASE don't waste your time trashing/arguing/debating my definition of this concept. Your time would be better spent determining your own definition of a dip, and understanding how you can profit from buying into one.

@hank, nice summary on 2009 drawdown. As I recall, it was scary time and the pace of decline was severe. In many way, it was much worse than the 2000 tech bubble. In 2009 drawdown, there were few safe harbor except for high quality bonds and cash. Just about all asset classes declined over 30% or more. I did rebalance out of bond back into equity several times. Majority of my equity buy came from 401(K) contribution. I held on the rest until they recovered. Wish I convert more to Roth like you did.

@hank : +1 Remarkable memory or did you take or make notes ?!
As for myself , I remember making a couple of buys on the way down & then shutting the buys down as Mr. Market kept going into a tail spin !! If working during that time ,money would have been added via 401-K.
Enjoying the weather, Derf

A diversion of sorts. Can’t help reflecting on the ‘07-‘09 “dip”. Over that approximately 18 month period I abandoned the normal allocation model. The market freefall and growing public panic began in the late summer or fall of ‘07. By the end of ‘07 I’d moved all my cash and short term stuff into equities. Damn - markets kept falling. So during the first half of ‘09 I moved all my bond funds into equities in stages. And in the second half of ‘08 I transferred all my balanced funds into aggresdive equity funds. In early 2009 I sold my domestic equity funds and moved close to 100% of assets into global equity funds (D&C / Oakmark) which had been hit harder than domestic equities had - being down around 50% from peak. In early March, and having nothing more to heave at the market, I converted about 50% of those global holdings into a Roth. I’d have converted more, but was restrained by the sum on hand available for taxes.
The markets bottomed March 9 or 10 and took off on a tear. I lucked out. It might have fallen farther. So “dipping”, if you want to call it that, worked out. But I’m now 75 instead of 61 or 62. Can’t imagine wanting to endure those 18 months again and to take the same degree of risk. And there have been market bears throughout history that persisted longer than those mere 18 months. Allocations are sweet. But when all hell breaks loose, as it did over those months, a new game plan needs to be rolled out.

Since people were writing about the current "dip" (less than 4%) I used current data. I would have gone back only through 2021 except that there was no dip in 2021 worth mentioning. So I looked at a full year (12 months of monthly investing).
Since people were considering a trigger of less than 4% here, and since I'm not going to do every combo, I did only the 3% 2020 trigger comparison:
Lump sum: 17.37% gain if invested Jan 2.
Lump sum: 18.22% gain if invested Feb 24th (after 4.7% drop from Feb 19):
Gains through 12/31/2020 when $100 invested on first trading day of month:
$17.37 + $17.56 + $23.36 +
$54.04 + $34.26 + $24.11 +
$21.54 + $14.80 + $7.07 +
$11.54 + $13.81 + 2.69 = $242.15
Gains through 12/31/2020 when $100 invested on the day market dips 3%+ (dip period in paren):
$18.41 (Jan 17-31) + $18.22 (Feb 19-24) + $26.03 (Mar 4 - Mar 5) +
$54.04 (Mar 26-Apr 1) + $34.66 (May 11-13) + $26.25 (June 8-11) +
$9.26 (Sept 2-3) + $9.26 (Sept 2-3) + $9.26 (Sept 2-3) +
$9.97 (Oct 12-19) + $0 (no 3% dips after Oct) + $0 (no 3% dips after Oct) = $215.36
This isn't even close. BTD helped a little in Jan, Feb, Mar, and June. But in the second half of the year as the market resumed its climb, it was months until there was another noticeable dip. That was in Sept. So a lot of ground was lost by waiting months to invest more money. And with no dips worth notice after October, $200 (the Nov and Dec allocations) remained univested.
FWIW:

• Jan dip was just over 3% for the dates indicated and market didn't go down further.
  
• Feb dip was 4.7% for dates indicated and continued down in Feb for a total of over 12%, so Feb allocation would have been invested at some point regardless of the trigger.
  
• March dipped over 12% by March 9th, so regardless of the trigger, BTD would have bought. And it would have been way too soon. The market continued to drop a total of over 28% in March before rebounding in the last week of the month.
  
• April 1 was the end of a 6%+ decline.
  
• May dip was 3.7% and didn't go down further.
  
• June dip was over 7% and didn't go down further.
  
• Sept dip was 3&frac12;% and continued to go down for a total of 9&frac12;% through the third week of Sept.
  
• Oct dip was just 3%, but after a 1% bounce, the market resumed its decline for a total of 7&frac12;% through the end of Oct.

Only when the market falls by 5% and if I think the market is overreacting, I used to start getting interested in adding. If the draw down continues to 6-7% or more, I used to start buying. My last buy the dip was a measly 3% increase in equities on October 30, 2020, after having bought equities massively in March-April and dripping in through August. 2021 has been a year of buy the diplets (not dips). I will never understand why the same smart guys allowed the market to dip 8% in October 2020 while a 2-3% drop now is considered a buying opportunity. The peak of economic growth rate was sometime in March and by April-May, India had already shown us what to expect from Covid variants. I am not trying to fight the market or win investing championships - I am trying to understand it to better sync with its rhythms - of course, I have been out of sync in 2021.

Long dissertation there about BTD, little of which is applicable to our specific situation.
If the poster was directing all that at me, maybe ask me some simple questions first next time, like, "What is the source(s) of your BTD funds?" and "What parameters, if any, do you you set?"
My answers would have been...We keep very little cash. 2020 and 2021 BTD funds came/come from the small % of cash on hand, selling bond OEFs, and/or maturing CD proceeds. We don't set ranges for the depth of the dip. We don't buy it every time and sometimes we buy bigger chunks than others. We had no funds available for the mid-Aug 2021 dip and chose to NOT sell any bond OEFs that time around. So EVERY 2020 and 2021 dip BUY we made has a positive TR. More importantly and relevant to any analysis of this issue though, the TR of EVERY BTD trade is incrementally-to-exponentially greater than its TR had the funds stayed where they were. So, enough of all that stuff.

BTD sounds good in theory, but then so does "buy low, sell high". Easier said than done.
1. Where does the cash come from?
2. When does one pull the trigger, i.e. how much does the dip need to be to buy?
The examples below are not intended to "prove" that BTD doesn't work. Sometimes it does, sometimes it doesn't. Obviously if one waits for too large a dip before buying, one is stuck holding cash forever. And if one pulls the trigger on small dips, one risks losing a little bit on most buys - there are frequent small dips that don't bring the market back down to below where you started.
So I'm curious about how people choose their thresholds and where they get their cash.

---

Here are some sample scenarios starting on Oct 1, 2020 (roughly a year ago), comparing BTD with "buy when cash is available". I use VFIAX as the investment vehicle and market proxy. Red font indicates longer delays (more than a month) before investing on a dip.
For Q1 (where does the cash come from), I have worked through two hypotheticals:
a) One starts with $1200 on Oct 1
b) One has a spare $100 (perhaps from income) at the beginning of each month ($1200 total)
For Q2 (when to buy the dip), I've worked through 1%, 2%, 3%, 4%, 5%, 6%, 7% triggers. There were no dips of 8% or more over the past year.
Lump sum investing: 33.6844% gain on $1200 = $404.21 gain (returns from M*)
Lump sum, invest on dip (on day fund drops specified percentage):
1% dip (Oct 12-Oct 14): 29.4760% gain on $1200 = $353.71 gain
2%, 3% dips (Oct 12 - Oct 19): 31.8043% gain on $1200 = $381.65 gain
4% dip (Oct 12 - Oct 27): 33.1892% gain on $1200 = $398.27 gain
5%, 6%, 7% dips (Oct 12 - Oct 28): 38.0612% on $1200 = $456.73 gain; these are winners
To come out ahead in this time frame with a lump sum and waiting for a dip, one must wait for a 5% - 7% dip. Any faster trigger and one gains less. Any slower trigger, i.e. waiting for an 8%+ dip that never comes, and one is left holding cash and losing out on a $400 gain.
Monthly $100 investing (not waiting for dip):
Oct 1: 33.68% x $100 = $33.68 gain
Nov 2: 36.40% x $100 = $36.40 gain
Dec 1: 23.07% x $100 = $23.07 gain
Jan 4: 21.64% x $100 = $21.64 gain
Feb 1: 19.13% x $100 = $19.13 gain
Mar 1: 15.08% x $100 = $15.08 gain
Apr 1: 11.56% x $100 = $11.56 gain
May 3: 6.87% x $100 = $6.87 gain
June 1: 6.47% x $100 = $6.47 gain
July 1: 3.45% x $100 = $3.45 gain
Aug. 2: 1.78% x $100 = $1.78 gain
Sept. 1: -1.44% x $100 = -$1.44 (loss)
Total gain: $177.69
----------------------
Monthly $100 investing, waiting for a 1% dip:
Oct 1, dip Oct 12-14, 29.48% x $100 = $29.48 gain
Nov 2, dip Nov 16-18, 26.40% x $100 = $26.40 gain
Dec 1, dip Dec 8 -11, 22.97% x $100 = $22.97 gain
Jan 4, dip Jan 8 - 15, 19.38% x $100 = $19.38 gain
Feb 1, dip Feb 12-22, 15.87% x $100 = $15.87 gain
Mar 1, dip March 1 - 3, 17.37% x $100 = $17.37 gain
Apr 1, dip April 16 - 20, 8.39% x $100 = $8.39 gain
May 3, dip May 7 - 10, 6.94% x $100 = $6.94 gain
June 1, dip Jun 14 - 18, 7.30% x $100 = $7.30 gain
July 1, dip July 12 - 16, 3.23% x $100 = $3.23 gain
Aug 2, dip Aug 16 - 18, 1.39% x $100 = $1.39 gain
Sept 1, dip Sep 2 - 10, -0.29% x $100 = - $0.29 (loss)
Total gain: $158.43
----------------------
Monthly $100 investing, waiting for a 2% dip:
Oct 1, dip Oct 12-19, 31.80% x $100 = $31.80 gain
Nov 2, dip Jan 25 - 27, 19.92% x $100 = $19.92 gain
Dec 1, dip Jan 25 - 27, 19.92% x $100 = $19.92 gain
Jan 4, dip Jan 25 - 27, 19.92% x $100 = $19.92 gain
Feb 1, dip Feb 12-25, 17.27% x $100 = $17.27 gain
Mar 1, dip March 1 - 3, 17.37% x $100 = $17.37 gain
Apr 1, dip May 7 - 12, 10.23% x $100 = $10.23 gain
May 1, dip May 7 - 12, 10.23% x $100 = $10.23 gain
June 1, dip Jun 14 - 18, 7.30% x $100 = $7.30 gain
July 1, dip July 12 - 19, 4.89% x $100 = $4.89 gain
Aug 2, dip Sept 2 - 14, 0.30% x $100 = $0.30 gain
Sept 1, dip Sept 2 - 14, 0.30% x $100 = $0.30 gain
Total gain: $159.45
----------------------
Monthly $100 investing, waiting for a 3% dip:
Oct 1, dip Oct 12-19, 31.80% x $100 = $31.80 gain
Nov 2, dip Jan 25 - 29, 21.08% x $100 = $21.08 gain
Dec 1, dip Jan 25 - 29, 21.08% x $100 = $21.08 gain
Jan 4, dip Jan 25 - 29, 21.08% x $100 = $21.08 gain
Feb 1, dip Feb 12-26, 17.82% x $100 = $17.82 gain
Mar 1, dip March 1 - 4, 19.12% x $100 = $19.12 gain
Apr 1, dip May 7 - 12, 10.23% x $100 = $10.23 gain
May 1, dip May 7 - 12, 10.23% x $100 = $10.23 gain
June 1, dip Sept 2 - 20, 2.25% x $100 = $2.25 gain
July 1, dip Sept 2 - 20, 2.25% x $100 = $2.25 gain
Aug 2, dip Sept 2 - 20, 2.25% x $100 = $2.25 gain
Sept 1, dip Sept 2 - 20, 2.25% x $100 = $2.25 gain
Total gain: $161.44
----------------------
Monthly $100 investing, waiting for a 4% dip:
Oct 1, dip Oct 12-27, 33.19% x $100 = $33.19 gain
There are no 4% or greater dips after October, so $1100 remains uninvested
Total gain: $33.19
----------------------
Monthly $100 investing, waiting for 5%, 6%, 7% dip:
Oct 1, dip Oct 12-28, 38.06% x $100 = $38.06 gain
There are no 4% or greater dips after October, so $1100 remains uninvested
Total gain: $38.06

+1

Um no, no reasonable investor rules out a stock market correction and nothing I posted suggested that.
Yes, several of those factors I posted will likely be there for years, possibly beyond my remaining number.
What's it all mean, to me at least?
(1) It seems likely those and other positive market factors will collectively act to possibly limit/reduce the number, severity and/or duration of corrections and bear markets.
(2) I will continue with stock allocations stretched to the top of my allocation range UNTIL the risk/reward of bond funds, CDs and/or MMkts significantly improves.
(3) I will continue to BTD until it stops working.
YMMV.

I was primarily suggesting that given substantial confounding factors, there's not much that can be inferred about the utilities industry from the way it behaved in the 70s. At least not without a lot of work and guesswork that I didn't provide.
One may not be able to say much even in broad terms. Giroux wrote in the last semiannual report that "utilities, in particular, have completely decoupled from Treasury and corporate bonds unlike at any time in the last 40 years."
Regarding utility funds investing in telecom and energy, most do tend to hold a healthy slug of these. The only fund I know of that hews to the traditional path is FKUQX (NTF many places), FRUAX (NTF, $100K min at TIAA, Firstrade).

Well, the steady march upward seems as convoluted and hard to explain to myself as it does to many market observers. The nice thing about maintaining an allocation model is it prevents us reacting emotionally to whatever perceptions we and the pundits happen to hold at any particular moment. While I’ll confess to some slight trading around the edges, the portfolio remains allocated as planned.
Yes, markets usually go up. It may well be that all the reasons suggested here and elsewhere (like the millennials inheriting trillions and the Fed being on our side) will be enough to keep the beast climbing higher.
However, to borrow a lovely phrase from a lovely poem by Andrew Marvell …
“But at my back I always hear … This and This

https://northsquareinvest.com/wp-content/uploads/2021/04/Active-Insight-Podcast-Transcript-Red-Cedar-8-April-2021-2.pdf
Insightful article speaks to de-risking a portfolio, perspective on 60/40 portfolio going forward, use of Preferred's as a portion of a portfolio, updated thinking regarding fixed income portion of a portfolio.
Best Regards,
Baseball Fan
(pardon my non ability to hyperlink the article)

@stillers
I would add that there are way less outstanding shares/co's to purchase over the past 10-12 years..due to private co's having easier access to capital no need to go public, sure buybacks, different less capital intensive co's such as software based need less capital so no rush to go to market, etc.
So would it be wrong to say that this is an "inflationary scenario" causing the market to continusouly rise due to supply/demand....more money chasing less product....
"Transitionary"...who knows??
Baseball Fan

@waxman who said "Leveraged loans and BDC's, stay far, far away IMHO." Would you care to elaborate?

Sure, these are very volatile beasts that can be traded but are not good long term investments, in my opinion. Since 2013 BIZD (an etf that holds BDC's) has a sharpe ratio of .40 with a max DD of 44.53%. In the leveraged loan department it depends on the issue, but a popular CEF like OXLC had an over 60% drawdown over that same period. As for HNDL, like most anything else, it needs to be watched but the ETF has a good strategy in terms of stability while looking for opportunity and has done well in its short life. As someone who has traded CEFs for many years I'm looking to HNDL as more of a longer term holding to provide cash flow. Not many great options these days.

@carew388: a member tipped me off to AIEQ the other day. It bears watching. An MFO search on the symbol reveals that @Ted, our late colleague, mentioned the fund when it came to market in 2018. Your comment wasn’t off-topic.

"There must be some phenomenon market pundits have not been able to explain that is causing an overriding sentiment to keep the market in an upward trajectory and they are describing the symptom (BTD) as the cause."
No need to look for a phenomenon.
The list is pretty endless, and somewhat obvious.
Thinking out loud in no particular order...
1. Liquidity - a FED juiced market
2. Most bonds ain't worth the risk
3. Endless supply of new money - trillions of dollars on the sidelines
4. Inflation - while others worried/worry about it, we reallocated higher %'s to stocks starting late 2020 (We weren't/aren't alone in that strategy
5. Duh, the US stock markets have historically been/are still the best investments on the planet
6. Oh those millenials https://www.yahoo.com/finance/news/hard-bearish-stock-market-risk-121500864.html
7. Add any of a number of other reasons
Alternatively...
https://fifthperson.com/why-the-stock-market-keeps-rising/

There must be some phenomenon market pundits have not been able to explain that is causing an overriding sentiment to keep the market in an upward trajectory and they are describing the symptom (BTD) as the cause. We have not really had any meaningful dips in 10 - 11 months. Some of the so called dips during this period have been for wrong reasons. E.g., the late Jan dip. But there was no equivalent dip for the Archegos blow up which caught a couple of large international banks flat footed and resulted in many times more losses for Archegos than for Melvin in late Jan. Whoever figures out that unexplained / unpublished cause for the relentless upward trajectory makes a lot of money for the correct length of time in the market and suffers no FOMO or TINA along the way. A lot of people make money in the market but only a few make it for the right reasons.

From the pen of Randall Forsyth this week …
“You get off a roller coaster the same place you get on, which pretty well describes the week just past. After a nearly 2% plunge Monday, the major U.S. stock indexes ended the week at or a bit above where they had landed the previous Friday. All of which attests to the persistence of the BTFD (for “buy the dip”—you fill in the missing modifier) sentiment …”
(emphasis mine)
Barron’s September 27, 2021