Insider Dip Buying Strategy: Performance, Risks, and Market Context

The insider dip buying strategy—where corporate insiders purchase shares during stock dips—has shown post-2008 outperformance relative to the S&P 500, particularly for deeper dips [2]. Recent Bloomberg data indicates insiders are buying the S&P dip at the fastest pace since May 2025, with a buy/sell ratio of 0.5 amid AI-related tech selloffs [1]. The S&P 500 has gained 5.7% over the past 60 days with a volatility of 0.78% [0], reflecting recent market correction and rotation to defensive sectors (consumer staples, healthcare, industrials) [1].

1. Trade-off between risk and reward
   : The strategy offers higher upside potential but carries lower win rates and higher volatility compared to passive S&P 500 investing [2].
2. Fundamental vs market timing
   : Insiders focus on company fundamentals rather than broader market trends, meaning their purchases do not guarantee market outperformance [1].
3. Sector rotation
   : Recent insider activity aligns with a shift from overvalued tech stocks to defensive sectors [1].

: Higher volatility, lower win rate than S&P 500, insiders’ lack of market timing expertise [1,2]. Users should be aware of these factors when evaluating the strategy.
: Potential outperformance from deeper dips, alignment with defensive sector rotation amid market uncertainty [1,2].

• Post-2008 insider dip buys outperform S&P 500, especially for deeper dips [2].
• Recent insider buy/sell ratio (0.5) is at its highest since May 2025 [1].
• S&P 500 metrics: 5.7% 60-day gain, 0.78% volatility [0].
• Strategy trade-off: Lower win rate vs higher upside [2].