If you invested in the S&P 500 Index or Nasdaq-100 Index through the first half of 2026 using a monthly dollar-cost averaging (DCA) plan, you probably ended June feeling fairly positive (pun intended)
The S&P 500 delivered a total return of about 11% over the first six months of the year, while the Nasdaq-100 rose more than 16% from January levels and reached record highs above 30,600 points.
However, the journey was far from smooth. Markets tested investors when war broke out in Iran, raising concerns over oil prices, inflation and interest rates.
What Actually Happened In H1 2026?
Markets began 2026 strongly, supported by corporate earnings and continued momentum in the Artificial Intelligence (AI) trade. Conditions then shifted. The outbreak of war in Iran sent Brent crude oil prices higher and revived concerns over inflation and interest rates. A rotation away from mega-cap technology stocks also weighed on growth-heavy indices.
By March, the S&P 500 had fallen about 10% from its February peak. Investors who bought near the January or February highs faced several uncomfortable weeks. Those holding cash may have seen the March lows as the opportunity they had been waiting for.
Markets rebounded sharply in April. Optimism over a possible resolution to the Iran conflict, together with strong first-quarter earnings, helped lift sentiment.
By June, both indices were returning to record levels. The Nasdaq-100 crossed 30,000 for the first time and rose more than 33% from its March low in about 10 weeks. The Nasdaq-100 is currently trading at 28,000, while the S&P 500 is at around 7,400 as of 17 July 2026.
How Would A DCA Investor Have Fared?
A DCA investor would have invested a fixed amount into an S&P 500 or Nasdaq index fund at regular intervals, regardless of market conditions. This meant buying at relatively high levels in January and February, near the market lows in March, and again as markets recovered in April, May and June.
This is the type of situation DCA is designed for. As an investor, we do not need to predict when the market will bottom. By continuing to invest, some money was automatically deployed during the downturn, which helped lower the average entry price compared with investing everything near the January or February highs.
The difficult part was maintaining discipline. When the S&P 500 was down 10% and existing investments were in the red, the natural reaction may have been to pause contributions until markets had stabilised. However, investors who continued investing through March benefited more from the recovery than those who resumed investing only after markets had rebounded.
Investors who prefer to automate recurring investments can consider a platform such as Tiger Brokers that supports regular contributions and access to US-listed securities.
How A Buy-The-Dip Investor Would Have Fared?
An investor who correctly identified March 2026 as a buying opportunity and deployed spare cash near the lows would have earned strong short-term returns.
Buying the S&P 500 near 6,300 in March and holding until it closed above 7,200 in June would have produced a price gain of about 14% in three months. The Nasdaq-100 offered an even stronger result. An investor who bought near the March low and held until the index closed above 30,600 would have gained more than 33%.
On paper, buying the dip appears to have been the better strategy.
In practice, several things had to go right. The investor needed spare cash at the right time, the confidence to invest when sentiment was weak and the willingness to act while the geopolitical outlook remained uncertain.
This is harder than it sounds. When markets are falling, investors rarely know whether prices are near the bottom or only at the start of a deeper decline.
More active investors who want broad market access and advanced order tools may wish to compare platforms such as Interactive Brokers. Learn more about opening an Interactive Brokers account.
How Would Investing $1,000 A Month Have Performed?
To put the difference into perspective, consider an investor with $6,000 to invest during the first half of 2026.
One investor invests $1,000 at the start of every month from January to June. Another invests the full $6,000 at the start of January. Both portfolios are valued at the end of June.
| Index | Investment Approach | Total Invested | Approximate Value At End-June 2026 | Approximate Gain |
| S&P 500 | $1,000 invested each month | $6,000 | $6,443 | $443 |
| S&P 500 | $6,000 invested in January | $6,000 | $6,542 | $542 |
| Nasdaq-100 | $1,000 invested each month | $6,000 | About $6,980 | About $980 |
| Nasdaq-100 | $6,000 invested in January | $6,000 | About $7,190 | About $1,190 |
Investing the full $6,000 in January produced a higher return than investing $1,000 each month, as both indices rose strongly over the first half of 2026. This happened because more of the lump-sum investor’s money was invested for the full market rally. However, DCA still delivered positive returns while reducing the need to time the market.
The Fundamental Problem With Timing The Market
This is the main challenge with buying the dip. When it works, the results can be impressive.
When it does not, investors may remain in cash while markets continue rising. They may also buy too early and watch prices fall further, or buy too late after much of the recovery has already taken place.
Many investors who say they buy the dip also struggle to do so consistently. Some invest when sentiment is positive and stop when markets become volatile. This is the opposite of what buying the dip requires.
When DCA Is The More Reliable Choice
DCA is generally more practical because it removes the need to decide when to invest. It also reduces the influence of emotion and market timing.
For someone investing from a regular salary, DCA is a natural approach. You set aside part of your monthly income, invest it regularly and allow compounding to work over time.
It is also easier to maintain for people who do not have the time or interest to monitor markets closely.
For the average working adult, making regular contributions is more realistic than maintaining a large pool of spare cash, tracking market conditions and deciding when a fall is large enough to justify investing.
When Buying The Dip Can Work
Buying the dip can still add value when an investor has spare cash set aside for market opportunities, the temperament to invest when sentiment is negative and a sufficiently long investment horizon.
The cash should not be money needed for near-term expenses or other financial goals. Investors must also accept that markets may continue falling after they invest.
This approach may suit those who are further along in their wealth-building journey. They may already have a sizeable portfolio built through years of regular investing and can afford to keep an additional amount available for opportunistic purchases.
For these investors, combining a regular DCA plan with a smaller reserve for buying market dips may offer a sensible balance. DCA provides consistency, while the reserve allows them to take advantage of larger market declines.
Investors comparing mobile-first platforms for recurring investments and occasional dip-buying can also review Webull’s account features and fee structure.
Choose The Strategy You Can Follow Consistently
Both approaches worked during the first half of 2026, but for different reasons. The DCA investor benefited from consistency and the natural averaging effect of investing through a volatile period.
The investor who bought the dip may have earned stronger short-term returns, but only with the right combination of cash, conviction and timing.
A strategy only works if you can stick to it. In our opinion, for most investors, investing consistently is likely to be more reliable than trying to time every market downturn perfectly.
Read Also: Investing During Uncertain Times: Why Staying Disciplined Matters More Than Predicting The Market
Photo Credit: iStock/lucky-photographer
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