Yes, many investors use this strategy. If you’ve done your research and believe the company’s fundamentals are strong, a temporary drop in share price can be an opportunity to buy at a lower valuation.
When a healthy company’s stock price falls, it might be viewed as a chance to purchase shares at a discount. By buying during these dips, you can lower your average purchase price, potentially boosting your returns when the stock price recovers. This approach is based on the idea that the price drop is temporary and does not reflect any underlying issues with the company’s health or performance.